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3.16.2009

Chapter III Crimes of Undermining the Order of Socialist Market Economy

Chapter III Crimes of Undermining the Order of Socialist Market Economy

Section 1. Crimes of Manufacturing and Selling Fake and Shoddy Goods

Article 140. Any producer or seller who mixes up or adulterates products, passes fake imitations for genuine, sells seconds at best quality price, or passes unqualified products as qualified ones, with a sale amount of not less than 50,000 yuan and not more than 200,000 yuan, is to be sentenced to not more than two years of fixed-term imprisonment or criminal detention and may in addition or exclusively be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the sale amount is not less than 200,000 yuan and not more than 500,000 yuan, is to be sentenced to not less than two years and not more than seven years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the sale amount is not less than 500,000 yuan and not more than 2 million yuan, is to be sentenced to not less than seven years and may in addition be sentenced to a fine of not less than 50 percent and not more than 200
percent of the sale amount; when the sale amount is not less than two million yuan, is to be sentenced to 15 years of fixed-term imprisonment or life imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount or confiscation of property.

Article 141. Whoever produces or sells fake medicines which are sufficiently able to seriously endanger human health is to be sentenced to not more than three years of fixed-term imprisonment or criminal detention and may in addition or exclusively be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing serious harm to human health, is to be sentenced to not less than three years and not more than ten years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing death or particular harm to human health, is to be sentenced to not less than ten years of fixed-term imprisonment, life imprisonment, or death penalty and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount or confiscation of property.
The fake medicines referred to in this article mean those fake medicines as well as those medicines and non- medicines that fall into such a category as to be dealt with as fake medicines in accordance with the regulations of the "Law of the PRC Governing the Management of Pharmaceutical Products."

Article 142. Whoever produces, sells inferior medicines, thereby causing severe harm to human health is to be sentenced to not less than three years and not more than ten years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the consequences are particularly serious, the sentence is to be not less than ten years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount or confiscation of property.
The inferior medicines referred to in this article mean those inferior pharmaceutical products that fall into the category of inferior medicines in accordance with the regulations of the "Law of the PRC Governing the Management of Pharmaceutical Products."

Article 143. Whoever produces, sells foods that do not conform with hygienic standards which sufficiently gives rise to food poisoning accidents or other severe food- originated diseases is to be sentenced to not more than three years of fixed-term imprisonment and may in addition or exclusively be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing serious harm to human health, the sentence is to be not less than three years and not more than seven years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the circumstances are particularly serious, to be not less than seven years of fixed-term imprisonment or life imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount or confiscation of property.

Article 144. Whoever produces, sells foods that are mixed with poisonous or harmful non-food materials or knowingly sells such things is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention and may in addition or exclusively be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing serious food poisoning accidents or other serious food-originated diseases and giving rise to serious harm to human health, the sentence is to be not less than five years and not more than ten years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing death or particularly harm to human health, is to be punished in accordance with article 141 of the law.

Article 145.
Whoever produces medical apparatuses and instruments or medical hygiene materials that are not up to the national or industrial standards for safeguarding human health or sells such things while clearly knowing the fact, and if it is serious enough to endanger human health, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall also be fined not less than half but not more than two times the sales revenue; if it causes serious harm to human health, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than 10 years and shall also be fined not less than half but not more than two times the sales revenue; if the consequence is especially serious, he shall be sentenced to fixed-term imprisonment of not less than 10 years or life imprisonment, and shall also be fined not less than half but not more than two times the sales revenue or be sentenced to confiscation of property. [As amended on 28 December 2002]

[Preceding formulation: Whoever produces medical apparatus and instruments, and clinic-use sanitary materials which do not conform with the standards of the state and the trade aiming at protecting human health or knowingly sells such things, thereby giving rise to serious harm to human health is to be sentenced to not more than five years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the consequences are particularly serious, the sentence is to be not less than five years and not more than ten years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the circumstances are particularly odious, the sentence is to be not less than ten years of fixed-term imprisonment or life imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount or confiscation of property.]

Article 146. Whoever produces electrical appliances, pressure containers, explosive and combustible products that do not conform with the standards of the state and the trade aiming to protect the human safety and property or other products that do not conform with such standards or knowingly sells the above-mentioned products thereby giving rise to serious consequences is to be sentenced to not more than five years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when the consequences are particularly serious, the sentence is to be not less than five years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale.

Article 147. Whoever produces fake insecticides, fake animal-use medicines, fake chemical fertilizers or knowingly sells insecticides, animal-use medicines, chemical fertilizers and seeds which are fake or are no longer effective or any producer or seller who passes unqualified insecticides, animal-use medicines, chemical fertilizers and seeds as qualified ones, thereby giving rise to relatively large losses in production is to be sentenced to not more than three years of fixed-term imprisonment or criminal detention and may in addition or exclusively be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing grave losses in production, is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and may in addition be sentenced to a fine of not less than 50 percent and not more than 200 percent of the sale amount; when causing particularly grave losses in production, is to be sentenced to not less than seven years of fixed-term imprisonment or life imprisonment or confiscation of property.

Article 148. Production of cosmetics that fails to meet hygienic standards or knowingly selling such cosmetics that cause serious consequences shall be punished with imprisonment or criminal detention of less than three years, and a fine of over 50 percent but less than 100 percent of the sales amount.

Article 149. The production and selling of products prescribed under Articles 141 to 148 of this Section that does not constitute an offense under these articles but with sales amount exceeding 50,000 yuan, shall be convicted and punished according to provisions under Article 140 of this Section.

The production and selling of products prescribed under Articles 141 and 148 of this Section that constitutes an offense under these articles and Article 140, shall be convicted and punished under provisions carrying a heavier penalty.

Article 150. Units violating provisions between Articles 140 and 148 of this Section shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished according to provisions under the respective articles.

Section 2. Smuggling Offenses

Article 151. Smuggling arms, ammunitions, nuclear materials, or counterfeit currency notes shall be sentenced to imprisonment of over seven years, with a fine or forfeiture of property; for the less serious offenses to imprisonment of more than three years but less than seven years, and
with fine.

Smuggling out of the country prohibited cultural relics, gold, silver, and other precious metals and rare animals and their products shall be sentenced to imprisonment of over five years with fine; for less serious offenses to imprisonment of less than five years with fine.

Whoever smuggles rare plants or their products or any other goods or articles that are prohibited by the state from being imported or exported shall be sentenced to fixed-term imprisonment not more than five years or criminal detention, and/or be fined; or if the circumstances are serious, shall be sentenced to fixed-term imprisonment not less than five years and be fined. [As amended on 28 February 2009]

[Preceding formulation: Smuggling out of the country prohibited rare plants and their products shall be sentenced to imprisonment of less than five years with fine; or a fine alone; for serious cases, to imprisonment of over five years with fine.]

Offenses of an extraordinarily serious nature under Paragraphs 1 and 2 should be punished with life imprisonment or death, with forfeiture of property.

Units violating provisions under this article shall be fined, with personnel directly in charge and other directly responsible personnel being punished under the respective paragraphs of this article.

Article 152. Smuggling obscene movies, video tapes, audio tapes, pictures, books and journals, and other obscene articles for profit or dissemination shall be punished with imprisonment of more than three years but less than ten years with fine; for offenses of a serious nature to over ten years of imprisonment or life imprisonment, with fine or forfeiture of property; for offenses of a less serious nature to imprisonment or criminal detention or restraint of less than three years, and with fine.

Whoever transports overseas solid, liquid or gaseous waste into the territory of China by evading supervision and control of the Customs shall, if the circumstance is serious enough, be sentenced to fixed-term imprisonment of not more than five years and shall also, or shall only, be fined; if the circumstance is serious, he shall be sentenced to fixed-term imprisonment of not less than five years and shall also be fined. [Paragraph 2 added on 28 December 2002]

Where an entity commits any crime as mentioned in the preceding two paragraphs, it shall be fined, and the person in-charge and other persons who are held to be directly responsible shall be punished in accordance with the provisions in the preceding two paragraphs.[Paragraph amended on 28 December 2002]

[Preceding formulation of this paragraph: Units committing offenses under the preceding paragraph shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished under provisions of the preceding paragraph.]

Article 153. Smuggling goods and articles not mentioned in Articles 151, 152, and 347, as mentioned in Article 153, shall be respectively punished according to the following provisions, depending on seriousness of the offense:

(1) smuggling goods and articles carrying a tax of over 500,000 yuan shall be punished with imprisonment of over 10 years or life imprisonment, with a fine of over 100 percent but less than 500 percent of the evaded taxes, or forfeiture of property. Offenses of an extraordinary serious nature shall be punished according to provisions under Paragraph 4 of Article 151 of this law.
(2) smuggling goods and articles carrying a tax over 150,000 yuan but less than 500,000 yuan shall be punished with imprisonment of over three years but less than 10 years, with a fine of over 100 percent but less than 500 percent of the evaded taxes. Offenses of an extraordinarily serious nature shall be punished with imprisonment of over 10 years or life imprisonment, with a fine of over 100 percent but less than 500 percent of the evaded taxes, or forfeiture of property.
(3) smuggling goods and articles carrying a tax over 50,000 yuan and less than 150,000 yuan shall be punished with imprisonment or criminal detention of less than three years, with a fine of over 100 percent and less than 500 percent of the evaded taxes.
Units committing offenses under the preceding paragraph shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being sentenced to imprisonment or criminal detention of less than three years; and, for cases of a serious nature, to imprisonment of over three years and less than 10 years; and -- for cases of an extraordinary serious nature -- to imprisonment of over 10 years.
For smuggling cases not being detected for several occasions, fines should be based on an accumulation of all evaded taxes of such goods and articles.

Article 154. The following smuggling cases that constitute an offense under provisions of this section shall be convicted and sentenced according to provisions under Article 153 of this law:

(1) without the approval of the Customs and before settling defaulted taxes, sale for profit in China of bonded goods approved for import for the purposes of processing, assembly, and compensated trade, including raw and processed materials, parts, finished products, and equipment; and
(2) without the approval of the Customs and before settling defaulted taxes, sale for profits in China of goods and articles with reduced import duties or tax exemption.

Article 155.
Whoever commits any of the following acts shall be deemed as having committed the crime of smuggling and shall be punished in accordance with the relevant provisions of this Section:

(1) directly and illegally purchasing from smugglers articles the import of which is forbidden by the State; or directly and illegally purchasing from smugglers other smuggled goods and articles in relatively large quantities; or

(2) transporting, purchasing or selling in inland seas, territorial waters, boundary rivers or boundary lakes articles which are forbidden by the State from import and export; or

(3) transporting, purchasing or selling, without legal certificates and in relatively large quantities, goods or articles which are restricted by the State from import and export. [As amended on 28 December 2002]

[Preceding formulation: The following acts shall be regarded as smuggling offenses and punished according to the relevant provisions under this Section:

(1) those who illegally and directly buy from smugglers goods whose import has been banned by the state, or buy directly from smugglers other smuggled goods and articles in relatively large quantities;
(2) those who transport, buy, or sell, in inland seas or territorial waters, goods whose import has been banned by the state; or transport, buy, or sell goods whose import has been restricted by the state, in relatively large quantity and without legal documentation; and
(3) those who ship solid wastes into the country without being detected by the Customs
.]


Article 156. Whoever colludes with smugglers by supplying them with loans, funds, accounts, invoices, proofs, or such conveniences as transportation, safe- keeping, and mailing services, shall be regarded and punished as smuggling accomplices.

Article 157. Whoever provides armed escort to smugglers shall be seriously punished according to provisions under the first and fourth paragraphs of Article 151 of this law.
Whoever resorts to violence and threatening measures while resisting Customs detection shall be punished for smuggling and obstructing state organ personnel from enforcing their lawful duties provided under Article 277 of this law, and shall be punished for all offenses committed.

Section 3. Offenses Against Company and Enterprise Management Order

Article 158. Using forged certifications to apply for company registration or using other fraudulent means to falsely declare registered capital with intent to deceive company registration departments, where the registered capital so falsely declared is large in figures with serious consequences or of a severe nature, shall be punished by imprisonment or criminal detention of less than three years, with a fine or a separately imposed fine of over 1 percent but less than 5 percent of the falsely declared registered capital.

Units committing offenses under the preceding paragraph shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished with imprisonment or criminal detention of less than three years.

Article 159. Company promoters, shareholders who, in violation of provisions under the Company law, fail to pay up with currency notes, provide actual property, or transfer property rights; or falsely claim to have paid up the capital; or withdraw their capital upon registration of company, where the amount involved is large with serious consequences or of a serious nature, shall be punished with imprisonment or criminal detention of less than five years, with a fine or a separately imposed fine of over 2 percent but less than 10 percent of the amount of capital so falsely claimed to have been paid up or so withdrawn.

Units committing offenses under the preceding paragraph shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished with imprisonment or criminal detention of less than five years.

Article 160. Concealment of material facts or fabrication of major fraudulent contents in share-soliciting prospectuses, share-subscription applications, and bond solicitation by companies and enterprises for the purpose of issuing shares or company or enterprise bonds shall, in cases involving large amounts, with serious consequences, or of a serious nature, be punished with imprisonment or criminal detention of less than five years, with a fine or a separately imposed fine of over 1 percent and less than 5 percent of the illegally raised capital.

Units committing offenses under the preceding paragraph shall be punished with a fine, with personnel directly in charge and other personnel directly responsible being punished with imprisonment or criminal detention of less than five years.

Article 161.
Where any company or enterprises which is obliged to disclose information to its shareholders or the general public provides any false financial and accounting statements or conceals any important facts in such statements or fails to disclose any other important information that shall be disclosed according to law so that the interests of the shareholders or any other person are severely injured, or where there are other severe circumstances, the persons-in-charge who are held to be directly responsible and other directly liable persons shall be sentenced to fix-term imprisonment of not more than three years or detention, and/or shall be fined 20,000 yuan up to 200,000 yuan. [As amended on 29 June 2006]

[Preceding formulation: Personnel directly in charge and other directly responsible personnel of a company that presents false financial accounts or financial accounts with concealment of material facts to its shareholders and members of the public, that seriously hurt their interests, shall be punished with imprisonment or criminal detention of less than three years, with a fine or a separately imposed fine of over 20,000 yuan and less than 200,000 yuan.]

Article 162.

Whoever conceals or deliberately destroys financial vouchers, financial account books or financial statements, if the circumstances are serious, shall be sentenced to fixed-term imprisonment of less than five years or criminal detention, and/or be imposed a fine not less than 20,000 yuan but not more than 200,000 yuan. [Paragraph added on 25 December 1999]

Where any company or enterprise transfers or disposes of its properties by means of concealing its properties or undertaking fabricated debts or by any other means or goes through false bankruptcy so that the interests of the creditors or any other person are severely injured, the persons-in-charge who are held to be directly responsible and other directly liable persons shall be sentenced to fixed-term imprisonment of not more than five years or detention, and/or shall be fined 20,000 yuan up to 200,000 yuan [Paragraph added on 29 June 2006]

[Preceding formulation of this paragraph: Where a unit commits the crime as mentioned in the preceding paragraph, it shall be imposed a fine, and the persons who are directly in charge or persons who are directly responsible for the offence shall be punished according to the preceding paragraph. [Paragraph added on 25 December 1999]

Personnel directly in charge and other directly responsible personnel of a company or an enterprise that, during its liquidation process, conceal property or make false entries in its balance sheet or asset list, or distribute company or enterprise assets before repaying debts that seriously hurt the interests of creditors and other people, shall be punished with imprisonment or criminal detention of less than five years, with a fine or a separately imposed fine of over 20,000 yuan but less than 200,000 yuan.

Article 163.
Where any of the employees of any company or enterprise or any other entity exerts any property by taking advantage of his position or accepts any money or property of any other person so as to seek any benefits for such person, and if the amount is considerably large, he shall be sentenced to fixed-term imprisonment of not more than five years or detention. If the amount is huge, he shall be sentenced to fixed-term imprisonment of less than five years, and his properties may be confiscated.

Where any of the employees of any company or enterprise or any other entity violates the relevant provisions of the state by taking advantage of his position to accept kickbacks or commissions in any disguise and keeps them for himself, he shall be penalized according to the preceding paragraph.

Where anyone who is engaged in public services in any state-owned company, enterprise or any other state-owned entity or anyone is delegated by any state-owned company or enterprise or any other state-owned entity to any non-state-owned company or enterprise or any other entity to engage in public services commits any of the acts as described in either of the preceding paragraphs shall be convicted and penalized according to Articles 185 and 186 of the present Law.
[As amended on 29 June 2006]

[Preceding formulation: Enterprise work personnel who make use of their job opportunity to demand property from others, or illegally receive others property in exchange for benefits, shall, in cases involving relatively large amounts, be punished with imprisonment or criminal detention for less than five years; for cases involving a large amount, with imprisonment of over five years, and may be subject to forfeiture of property.

Company and enterprise work personnel, who, in the course of economic contacts, receive personal kick-backs and commissions in various forms in violation of state rules, shall be punished according to provisions under the preceding paragraph. Personnel performing public duties in state-owned companies and enterprises, and personnel assigned by state- owned companies and enterprises to non-state-owned companies and enterprises for performance of public duties found to be committing the acts mentioned in the two preceding paragraphs, shall be convicted and punished according to provisions under Articles 385 and 386 of this law
.]

Article 164.
Anyone who gives a considerably largely amount of money or property to any of the employees of any company or enterprise or any other entity for the purpose of seeking illegal benefits shall be sentenced to fixed-term imprisonment of not more than three years or detention. If the amount is huge, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years, and shall be fined.[As amended on 29 June 2006]

[Preceding formulation of this paragraph: Offering property to company and enterprise work personnel for improper benefits shall in cases involving relatively large amounts be punished with imprisonment or criminal detention for less than three years, for cases involving a large amount, with imprisonment of over three years but less than 10 years, and with fine.]
Units committing offenses under the preceding paragraph shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished according to provisions of the preceding paragraph. A briber who confesses his bribery act before prosecution may receive a lighter sentence or a waiver for punishment.

Article 165. Directors and managers of state-owned companies or enterprises who, in order to gain illegal benefits, make use of their job opportunity to conduct for themselves or others business similar to that conducted by companies or enterprises to which they attach, shall, in cases involving a large amount, be punished with imprisonment or criminal detention for less than three years, with a fine or a separately imposed fine, for cases involving extraordinarily large amounts, with imprisonment of over three years but less than seven years, and with fine.

Article 166. Work personnel in state-owned companies, enterprises, or institutions, who use their job opportunity to commit the following acts that seriously hurt state interests, shall be punished with imprisonment or criminal detention of less than three years, with a fine or a separately imposed fine; for cases that cause extraordinary huge losses to state interests, with imprisonment of over three years and less than seven years, and with fine:

(1) offering profitable business conducted by their own units to their relatives and friends for operation;
(2) buying merchandise from units operated and managed by their relatives and friends at a price apparently higher than market price or selling merchandise to units operated and managed by their relatives and friends at a price apparently lower than market price; or
(3) buying substandard merchandise from units operated and managed by their relatives and friends.

Article 167. People directly in charge of state-owned companies, enterprises, or institutions who are defrauded because of serious irresponsibility during the process of signing or fulfilling contracts and thus cause great damage to national interests shall be sentenced to not more than three years in prison or criminal detention. If they cause especially serious damage to national interests, they shall be sentenced to not less than three years and not more than seven years in prison.

Article 168.
Where an employee of a state-run company or enterprise is seriously irresponsible or abuses the office, causing its bankruptcy or serious losses to the state-owned company or enterprise, and causing heavy losses to the interests of the state, he shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention; where the losses to the interests of the state is extremely heavy, he shall be sentenced to fix-term imprisonment of not less than three years but not more than seven years. Where an employee of a state-owned institution commits the crime as mentioned in the preceding paragraph, causing heavy losses to the interests of the state, he shall be punished according to the preceding paragraph.

Where an employee of a state-owned company, enterprise or institution commits the crimes as mentioned in the preceding two paragraphs out of irregularities for favoritism, he shall be given a heavier punishment according to the first paragraph of this article. [As amended on 25 December 1999]

[Preceding formulation: People directly in charge of state-owned companies or enterprises who cause their companies or enterprises to go bankrupt or suffer serious losses through the practice of favoritism and thus cause great damage to national interests shall be sentenced to not more than three years in prison or criminal detention.]

Article 169. People directly in charge of state-owned companies or enterprises or higher competent departments who cause great damage to national interests by practicing favoritism and converting state-owned assets into low-value stocks or selling them at a low price shall be sentenced to not more than three years in prison or criminal detention. They shall be sentenced to not less than three years and not more than seven years in prison if they cause especially serious damage to national interests.

Article 169 (bis) Where any director, supervisor or senior manager of any listed company goes against his fiduciary duty to the company and takes advantage of his position to manipulate the listed company in any of the following circumstances so that the listed company suffers from any serious loss, he shall be sentenced to fixed-term imprisonment of not more than three years or detention, and/or shall be fined. If the listed company thus suffers from extremely serious losses, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall be fined:

(1) Providing any fund, commodity, service or any other asset gratuitously to any other entity or individual;

(2) Providing or accepting any fund, commodity, service or any other asset under obviously unfair terms;

(3) Providing any fund, commodity, service or any other asset to any entity or individual who obviously does not have the ability of repayment;

(4) Providing any guarantee to any entity or individual who obviously does not have the ability of repayment, or providing guarantee to any other entity or individual without justifiable reasons;

(5) Waiving any credit or undertaking any debt without justifiable reasons;

(6) Injuring the interests of the listed company by any other means.

Where the controlling shareholder or actual controller of a listed company instigates any of the directors, supervisors, or senior managers of the listed company to conduct any of the acts as described in the preceding paragraph, it or he shall be penalized according to the preceding paragraph.

If the controlling shareholder or actual controller of the listed company that commits the crime as described in the preceding paragraph is an entity, a fine shall be imposed upon the entity and the persons-in-charge who are held to be directly responsible and other directly liable persons shall be penalized according to the first paragraph herein. [As added on 29 June 2006]


Section 4. The Crimes of Undermining the Order of Financial Management

Article 170. Whoever counterfeits money shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan. In any of the following circumstances, he or she shall be sentenced to not less than 10 years in prison, life imprisonment, or death. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan or have his or her property confiscated:

(1) Where the individual concerned is the ringleader of a money-counterfeiting ring;
(2) Where the amount of money involved is especially large;
(3) Other especially serious circumstances.

Article 171. Whoever sells or buys a substantial amount of counterfeit money or transports it with the full knowledge that it is counterfeit shall be sentenced to not more than three years in prison or criminal detention. In addition, he or she shall be fined not less than 20,000 yuan and not more than 200,000 yuan. If the amount involved is large, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan. If the amount is especially huge, he or she shall be sentenced to not less than 10 years in prison or life imprisonment. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan or have his or her property confiscated.

Employees of banks or other financial institutions who buy counterfeit money or take advantage of their positions to trade counterfeit money for real currency shall be sentenced to not less than three years and not more than 10 years in prison. In addition, they shall be fined not less than 20,000 yuan and not more than 200,000 yuan. If the amount involved is large or if the circumstances are serious, they shall be sentenced to not less than 10 years in prison or life imprisonment. In addition, they shall be fined not less than 20,000 yuan and not more than 200,000 yuan or have their property confiscated. If the circumstances are not so serious, they shall be sentenced to not more than three years in prison or criminal detention.

They shall be fined, additionally or exclusively, not less than 10,000 yuan and not more than 100,000 yuan. Whoever counterfeits money and sells or transports the counterfeit money shall be convicted and given stiff punishment in accordance with the provisions in Article 170 of this law.

Article 172. Whoever knowingly possesses or uses a substantial amount of counterfeit money shall be sentenced to not more than three years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 10,000 yuan and not more than 100,000 yuan. If the amount involved is large, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 20,000 yuan and not more than 200,000 yuan. If the amount is especially large, he or she shall be sentenced to not less than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan or have his or her property confiscated.

Article 173. Whoever alters a substantial amount of money shall be sentenced to not more than three years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 10,000 yuan and not more than 100,000 yuan. If the amount is large, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 20,000 yuan and not more than 200,000 yuan.

Article 174.
Whoever establishes, without the approval of the competent authorities of the state, a commercial bank, securities exchange, futures exchange, futures brokering company, insurance company or other financial institutions, he shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and/or shall be imposed a fine of not less than 20,000 yuan but not more than 200,000 yuan; if the circumstances are serious, he shall be sentenced to fix-term imprisonment of not less than three years but not more than ten years, and/or shall be imposed a fine of not less than 50,000 yuan but not more than 500,000 yuan.

Whoever forges, alters or transfers the permit for operation or other documents of approval of a commercial bank, securities exchange, futures exchange, futures brokering company, insurance company or other financial institutions, he shall be punished according to the preceding paragraph.

Where a unit commits the crimes as mentioned in the preceding two paragraphs, it shall be imposed a fine, and the persons who are directly in charge or who are directly responsible for the offence shall be punished according to the first paragraph of this article
[As amended on 25 December 1999]

[Preceding formulation: Whoever sets up a commercial bank or any other financial institution without the People’s Bank of China’s permission shall be sentenced to not more than three years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 20,000 yuan and not more than 200,000 yuan. If the circumstances are serious, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan.

Whoever forges, alters, or transfers the business licenses of commercial banks or other financial institutions shall be punished in accordance with the provisions in the preceding paragraph.

Where the crimes mentioned in the preceding two paragraphs are committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be punished in accordance with the first paragraph
.]

Article 175. Whoever illegally obtains credit funds from a financial institution and relends them to other people at a high interest rate with the aim of making a profit shall be sentenced to not more than three years in prison or criminal detention, if the amount of illegal proceeds is substantial. In addition, he or she shall be fined a sum not less than 100 percent and not more than 500 percent as high as the amount of illegal proceeds. If the amount involved is large, he or she shall be sentenced to not less than three years and not more than seven years in prison. In addition, he or she shall be fined a sum not less than 100 percent and not more than 500 percent as high as the amount of illegal proceeds. If the crime mentioned in the preceding paragraph is committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be sentenced to not more than three years in prison or criminal detention.

Article 175 (bis) Where anyone obtains by fraudulent means any loan, acceptance of any instrument, letter of credit, letter of guarantee, etc. from any bank or any other financial institution so that any serious loss is caused to the bank or financial institution or any other serious consequence has resulted, he shall be sentenced to fixed-term imprisonment of not more than three years or detention, and/or shall be fined. If the loss caused to the bank or any other financial institution is extremely large or if there is any other extremely serious circumstance, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall be fined.

“Where any entity commits the crime as described in the preceding paragraph, it shall be fined, and the persons-in-charge who are held to be directly responsible and other directly liable persons shall be penalized according to the preceding paragraph.
[As added on 29 June 2006]

Article 176. Whoever takes deposits from people illegally or in disguised form and disrupts financial order shall be sentenced to not more than three years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 20,000 yuan and not more than 200,000 yuan. If the amount involved is large or if the circumstances are otherwise serious, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan. If the crime mentioned in the preceding paragraph is committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be punished in accordance with the provisions in the preceding paragraph.

Article 177. Whoever forges or alters financial bills in any of the following ways shall be sentenced to not more than five years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 20,000 yuan and not more than 200,000 yuan. If the circumstances are serious, he or she shall be sentenced to not less than five years and not more than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan. If the circumstances are especially serious, he or she shall be sentenced to not less than 10 years in prison or life imprisonment. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan or have his or her property confiscated:

(1) Forging or altering bank drafts, cashier’s checks, and checks;
(2) Forging or altering documents authorizing collection of payments, remittance documents, certificates of deposit, and other account-settlement documents;
(3) Forging or altering letters of credit or accompanying documents;
(4) Forging credit cards.

If the crimes mentioned in the preceding paragraph are committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be punished in accordance with the provisions in the preceding paragraph.

Article 177 (bis) Under any of the following circumstances, anyone who disrupts the management of credit cards shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention or deprivation of political rights, and shall be concurrently or separately fined 10, 000 yuan up to 100, 000 yuan; if the sum involved is huge or if there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of 3 up to 10 years and shall be concurrently fined 20,000 yuan up to 200,000 yuan:

(1) knowingly holding or transporting a relatively large number of counterfeited credit cards or blank credit cards;

(2) unlawfully holding a relatively large number of others’ credit cards;

(3) having obtained credit cards by using false identity certification;

(4) selling, selling, providing others with counterfeited credit cards or obtaining credit cards by using false identity certification.

Anyone who steals, buys or illicitly supplies information of others’ credit cards shall be punished in accordance with the preceding paragraph.

Any employee of a bank or of any other financial institution who violates any of the crimes as described in the second paragraph by taking the advantage of his position shall be given a heavier punishment. [Added on 28 February 2005]


Article 178. Whoever forges or alters treasury bonds or other negotiable securities issued by the state involving a substantial amount of money shall be sentenced to not more than three years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 20,000 yuan and not more than 200,000 yuan. If the amount is large, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan. If the amount is especially large, he or she shall be sentenced to not less than 10 years in prison or life imprisonment. In addition, he or she shall be fined not less than 50,000 yuan and not more than 500,000 yuan or have his or her property confiscated.

Whoever forges or alters share certificates or company and enterprise bonds involving a substantial amount of money shall be sentenced to not more than three years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 10,000 yuan and not more than 100,000 yuan. If the amount is large, he or she shall be sentenced to not less than three years and not more than 10 years in prison. In addition, he or she shall be fined not less than 20,000 yuan and not more than 200,000 yuan.

If the crimes mentioned in the preceding two paragraphs are committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be punished in accordance with the provisions in the preceding two paragraphs.

Article 179. Whoever issues shares or company and enterprise bonds involving a large amount of money without the permission of relevant state departments shall be sentenced to not more than five years in prison or criminal detention if the consequences are serious or if the circumstances are otherwise serious. He or she shall be fined, additionally or exclusively, a sum not less than 1 percent and not more than 5 percent of the illegally raised funds.

If the crime mentioned in the preceding paragraph is committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be sentenced to not more than five years in prison or criminal detention.

Article 180.
Whoever has inside information on securities or futures transactions or illegally obtains inside information on securities or futures transactions, and prior to the release of the information that involves the issuance of securities or securities or futures transactions or other information that has a material effect on the transaction price of securities or futures, buys or sells the said securities, engages in the futures transaction related to the inside information, leaks the said information, or explicitly or implicitly advises others to engage in the aforesaid transaction activities shall, if the circumstances are serious, be sentenced to fixed-term imprisonment not more than five years or criminal detention, and/or be fined 1 to 5 times the illegal gains; or if the circumstances are extremely serious, shall be sentenced to fixed-term imprisonment not less than five years but not more than ten years, and be fined 1 to 5 times the illegal gains [As amended on 28 February 2009]

[Preceding formulation of this paragraph: Any insider who possesses inside information about any stock or futures exchange transactions, or anyone who illegally obtains such information, prior to the publication of the information that concerns stock or futures exchange transactions that has a vital bearing on the stock price, buys or sells the very stock or divulges the very information, shall, if the circumstances are serious, be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and/or be imposed a fine of not less than one time but not more than five times of the illegal gains; if the circumstances are extremely serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than 10 years and shall also be imposed a fine of not less than one time but not more than five times of the illegal gains.]

Where a unit commits the crime as mentioned in the preceding paragraph, it shall be imposed a fine, and the persons who are directly in charge or who are directly responsible for the offence shall be sentenced to fix-term imprisonment of not more than five years or criminal detention. The range of inside information and the insiders shall be determined in accordance with the laws and administrative regulations

[Preceding formulation of this paragraph: People who have inside information on securities trading, illegally obtain inside information on securities trading, or buy or sell securities or leak relevant information prior to the release of information that could have a major effect on the issuance and trading of the securities concerned or on the price of other securities shall be sentenced to not more than five years in prison or criminal detention, provided the circumstances are serious. They shall be fined, additionally or exclusively, a sum not less than 100 percent and not more than 500 percent as high as their illegal proceeds. If the circumstances are especially serious, they shall be sentenced to not less than five years and not more than 10 years in prison. In addition, they shall be fined a sum not less than 100 percent and not more than 500 percent as high as their illegal proceeds.

If the crimes mentioned in the preceding paragraph are committed by a unit, the unit in question shall be fined, and the individual directly in charge of it or people who are directly responsible shall be sentenced to not more than five years in prison or criminal detention.

The scope of inside information shall be defined by relevant provisions in laws and administrative rules.

People with inside information shall be defined by relevant provisions in laws and administrative rules].

Where any practitioner of a stock exchange, a futures exchange, a securities company, a futures brokerage company, a fund management company, a commercial bank, an insurance company or any other financial institution or any staff member of the relevant regulatory department or industry association uses any undisclosed information obtained by taking advantage of his position other than the inside formation to engage in the securities or futures transaction activities related to the said information or explicitly or implicitly advise others to engage in the relevant transaction activities in violation of the relevant provisions, and the circumstances are serious, he shall be punished under paragraph 1. [Paragraph added on 28 February 2009]

Article 181. Whoever fabricates and spreads false information to adversely affect stock or futures exchange transactions, disrupt the stock or futures exchange market shall, if the consequences are serious, be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and/or be imposed a fine of not less than 10,000 yuan but not more than 100,000 yuan.

Any employee of a stock exchange, futures exchange, securities company or futures brokering company or any member of a securities association or futures association or department for the administration of securities or futures who deliberately provides false information or forges, alters or destroys transaction records in order to cajole investors into buying or selling securities or futures contracts and thus serious consequences have resulted, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and/or shall be imposed a fine of not less than 10,000 yuan but not more than 100,000 yuan; if the circumstances are extremely serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than 10 years, and/or shall be imposed a fine of not less than 20,000 yuan but not more than 200,000 yuan.

Where a unit commits the crime as mentioned in the preceding two paragraphs, it shall be imposed a fine, and the persons who are directly in charge or who are directly responsible for the crime shall be sentenced to fix-term imprisonment of not more than five years or criminal detention
[As amended on 25 December 1999]

[Preceding formulation: Whoever disrupts securities trading markets and causes serious consequences by fabricating or disseminating false information that could have an effect on securities trading shall be sentenced to not more than five years in prison or criminal detention. He or she shall be fined, additionally or exclusively, not less than 10,000 yuan and not more than 100,000 yuan.

Employees of securities exchanges, securities companies, securities associations, or securities management departments shall be sentenced to not more than five years in prison or criminal detention if they intentionally provide false information; forge, alter, or destroy trading records; or trick investors into buying or selling securities, giving rise to serious consequences. They shall be fined, additionally or exclusively, not less than 10,000 yuan and not more than 100,000 yuan. If the circumstances are especially adverse, they shall be sentenced to not less than five years and not more than 10 years in prison. In addition, they shall be fined not less than 20,000 yuan and not more than 200,000 yuan. If the crimes mentioned in the preceding two paragraphs are committed by a unit, the unit in question shall be fined, and the individual directly in charge of it and other people who are directly responsible shall be sentenced to not more than five years in prison or criminal detention
.]


Article 182.
Where any of the following circumstances arises, and if the circumstances are serious, the person who manipulates the securities or futures market shall be sentenced to fixed-term imprisonment of not more than five years or detention, and/or shall be fined. If the circumstances are extremely serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than 10 years, and shall be fined:

(1) Manipulating the trading prices of securities or futures or the trading volume of securities or futures by concentrating independently or by collusion the advantages in capital or the advantages in shareholding or positions or the advantage in information so as to carry out colluded or continuous transactions;

(2) Colluding with any other person to carry out securities or futures transactions with each other according to the time, price or ways as agreed to in advance so that the trading prices or volumes of securities or futures are affected;

(3) Making securities transactions among the accounts under the actual control of his own or taking himself as the object of trading of futures agreements so that the trading prices or volumes of securities or securities are affected;

(4) Manipulating the securities or futures markets by any other means.

Where any entity commits the crime as described in the preceding paragraph, a fine shall be imposed upon the entity, and the persons-in-charge who are held to be directly responsible any other liable persons shall be penalized according to the preceding paragraph.[As amended on 29 June 2006]

[Preceding formulation: Whoever commits any of the following acts by rigging stock or futures prices in order to obtain illegitimate profits or transfer risks shall, if the circumstances are serious, be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and/or shall be imposed a fine of not less than one time but not more than five times of the illegal gains:

(1) rigging stock or futures prices by working alone or by conspiracy in concluding transactions jointly or continuously through a mustering superiority in the holding of funds, shares or futures storage or in the use of information;

(2) affecting stock or futures prices or the volume of stock or futures transactions by colluding with another and carrying out stock or futures exchange transactions between themselves at a time, price or in a manner previously agreed upon, or buying or selling between themselves the securities they do not hold;

(3) affecting the prices of stock or futures or the volume of stock or futures transactions by taking himself as the counterpart of transaction and trading in stocks with himself without transferring ownership of the securities or trading in the futures contracts; or

(4) rigging the prices of stock or futures by any other means.

Where a unit commits any of the crimes as mentioned in the preceding paragraph, it shall be imposed a fine, and the persons who are directly in charge and the persons who are directly responsible for the crime shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention. [As amended on 25 December 1999
]

[Preceding formulation: Whoever rigs securities trading prices and obtains illegitimate benefits or shifts the risk in any of the following ways shall be sentenced to not more than five years in prison or criminal detention, provided the circumstances are serious. He or she shall be fined, additionally or exclusively, a sum not less than 100 percent and not more than 500 percent as high as his or her illegal proceeds:

(1) Taking advantage of one’s financial strength, stock holdings, or information to jointly or continuously sell or buy securities and rig securities trading prices, either on one’s own or by conspiring with other people;
(2) Affecting securities trading prices or volume by conducting securities transactions with each other or by buying or selling each other’s securities at a predetermined time and price and through a predetermined method in collaboration with other people;
(3) Affecting securities trading prices or volume by taking oneself as the only party to a transaction and buying from or selling to oneself without transferring the right to own the securities;
(4) Rigging securities trading prices by other means.

If the crimes mentioned in the preceding paragraph are committed by a unit, the unit in question shall be fined, and the individual directly in charge of it or other people directly responsible shall be sentenced to not more than five years in prison or criminal detention.]


Article 183. Personnel of insurance companies who take advantage of their office to intentionally make false claims on insured incidents which have not occurred to defraud insurance indemnity are to be sentenced and punished in accordance with the stipulations of Article 271 of this law.

Personnel of state-owned insurance companies and personnel delegated by state-owned insurance companies to perform official duties in non-state-owned insurance companies who commit an act mentioned in the preceding paragraph are to be sentenced and punished in accordance with the stipulations in Article 382 and Article 383 of this law.

Article 184. Personnel of banks or other monetary institutions who ask others for money or goods, or illegally accept money or goods from others in activities of monetary business and seek benefits for others, or accept rebate or service charges for themselves under various pretexts in violation of state stipulations are to be sentenced and punished in accordance with the stipulations of Article 163 of this law.

Personnel of state-owned monetary institutions and personnel delegated by state-owned monetary institutions to perform official duties in non-state-owned monetary institutions who commit an act mentioned in the preceding paragraph are to be sentenced and punished in accordance with the stipulations in Article 385 and Article 386 of this law.

Article 185.
Any employee of a commercial bank, securities exchange, futures exchange, securities company, futures brokering company, insurance company or of any other banking institution who, by taking advantage of his position, misappropriates money belonging to the unit or any client shall be convicted and punished according to Article 272 of this Law.

If any employee of a State-owned commercial bank, stock exchange, futures exchange, securities company, futures brokering company, insurance company or other banking institution or any person who is assigned by a state-owned commercial bank, stock exchange, futures exchange, securities company, futures brokering company, insurance company or other banking institution to an institution that is not owned by the state to engage in public service commits the act as mentioned in the preceding paragraph, he shall be convicted and punished according to the provisions in Article
384 of this Law. [As amended on 25 December 1999]

[Preceding formulation: Personnel of banks or other monetary institutions who take advantage of their office to misappropriate funds of their respective institutions or customers are to be sentenced and punished in accordance with the stipulations of Article 272 of this law
.
Personnel of state-owned monetary institutions and personnel delegated by state-owned monetary institutions to perform official duties in non-state-owned monetary institutions who commit an act mentioned in the preceding paragraph are to be sentenced and punished in accordance with the stipulations of Article 384 of this law
.]

Article 185 (bis) Where any commercial bank, stock exchange, futures exchange, securities company, futures brokering company, insurance company, or any other financial institution violates its fiduciary duty, unlawfully utilizes the funds or any other entrusted property of its clients, and if the circumstances are serious, a fine shall be imposed upon the entity, and the persons-in-charge who are held to be directly responsible as well as other directly liable persons shall be sentenced to fixed-term imprisonment of not more than three years or detention, and shall be fined 30,000 yuan up to 300,000 yuan. If the circumstances are extremely serious, they shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years, and shall be fined 50,000 yuan up to 500,000 yuan.

Where any public fund management institution such as a social security fund management institution or housing accumulation fund management institution, or any insurance company, insurance asset management company, or securities investment fund management company violates any of the state provisions in its use of funds, the persons-in-charge who are held to be directly responsible and other directly liable persons shall be penalized according to the preceding paragraph.
[As added on 29 June 2006]

Article 186. Where any of the employees of any bank or any other financial institution grants any loan by violating the relevant provisions of the state and the sum is huge or any serious loss has resulted, he shall be sentenced to fixed-term imprisonment of not more than five years or detention, and shall be fined 10,000 yuan up to 100,000 yuan. If the sum is extremely huge or extremely serious losses have resulted, he shall be sentenced to fixed-term imprisonment of more than five years, and shall be fined 20,000 yuan up to 200,000 yuan [As amended on 29 June 2006]

[Preceding formulation: Personnel of banks or other monetary institutions who violate the stipulations of laws and administrative regulations to grant fiduciary loans to related people or to grant secured loans with conditions better than those for granting similar loans to other borrowers, thus causing relatively big losses, are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and to a fine of not less than 10,000 yuan and not more than 100,000 yuan; when the losses are serious, the sentence is to be not less than five years of fixed-term imprisonment, and a fine of not less than 20,000 yuan and not more than 200,000 yuan.]

Where any employee of any bank or any other financial institution violates the relevant provisions of the state to grant loans to any of his relatives, he shall be penalized according to the preceding paragraph. [As amended on 29 June 2006]

[Preceding formulation: Personnel of banks or other monetary institutions who violate the stipulations of laws and administrative regulations to grant loans to people other than the related people, thus causing serious losses, are to be sentenced to not more than five years of imprisonment or criminal detention, and a fine not less than 10,000 yuan and not more than 100,000 yuan; when the losses are especially serious, the sentence is to be not less than five years of fixed-term imprisonment, and a fine not less than 20,000 yuan and not more than 200,000 yuan.]

Institutions that commit a crime mentioned in the preceding two paragraphs are to be sentenced to a fine, and personnel in charge directly responsible for the crime and other personnel directly responsible for the crime are to be punished in accordance with the stipulations in the preceding two paragraphs. The scope of related people is determined in accordance with "The Law of Commercial Banks of the People’s Republic of China" and other monetary laws and regulations concerned.

Article 187.
Where any employee of any bank or any other financial institution accepts the money of any client without writing it into the accounts, and if the sum is huge or if any serious loss has resulted, he shall be sentenced to fixed-term imprisonment of not more than five years, and shall be fined 20,000 yuan up to 200,000 yuan. If the sum is extremely huge or the losses are extremely serious, he shall be sentenced to fixed-term imprisonment of five years or more, and shall be fined 50,000 yuan up to 500,000 yuan. [As amended on 29 June 2006]

[Preceding formulation: Personnel of banks or other monetary institutions who, with the purpose of making profits, absorb customers’ funds without entering an item in their accounts, and illegally use such funds for calling or granting loans, thus causing serious losses, are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and to a fine not less than 20,000 yuan and not more than 200,000 yuan; when the losses are especially serious, the sentence is to be not less than five years of fixed-term imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan.]

Institutions which commit a crime mentioned in the preceding paragraph is to be sentenced to a fine, and personnel in charge directly responsible for the crime and other personnel directly responsible for the crime are to be punished in accordance with the stipulations in the preceding paragraph.

Article 188.
Where any employee of any bank or any other financial institution violates the relevant provisions when issuing any letter of credit, letter of guarantee, instrument, certificate of deposit, certification of credit, etc. to any other person, and if the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not more than five years or detention. If the circumstances are extremely severe, he shall be sentenced to fixed-term imprisonment of five years or more. [As amended on 29 June 2006]

[Preceding formulation: Personnel of banks or other monetary institutions who violate stipulations to issue for others letters of credit, or other letters of guarantee, bills, deposit receipts, and credit certificates, thus causing relatively serious losses, are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention; when the losses are very serious, the sentence is to be not less than five years of fixed-term imprisonment.]

Institutions which commit a crime mentioned in the preceding paragraph are to be sentenced to a fine, and personnel in charge directly responsible for the crime, or other personnel directly responsible for the crime are to be punished in accordance with the stipulations of the preceding paragraph.

Article 189. Personnel of banks or other monetary institutions who, in handling bills, accept, make payment for, or stand guarantee for, bills which are issued in violation of laws and regulation, thus causing serious losses, are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention; when the losses are especially serious, the sentence is to be not less than five years of fixed-term imprisonment.

Institutions that commit a crime mentioned in the preceding paragraph are to be sentenced to a fine, and personnel in charge directly responsible for the crime and other personnel directly responsible for the crime are to be punished in accordance with the stipulations in the preceding paragraph.

Article 190. State-owned companies, enterprises, or other state-owned institutions which violate state stipulations and deposit foreign exchange abroad without authorization, or illegally transfer foreign exchange abroad, and the circumstances are series, are to be sentenced to a fine, and personnel in charge directly responsible for it, and other personnel directly responsible for it are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention.

Article 191.
Where anyone who obviously knows that any incomes are obtained from any drug-related crime, organizational crime of any gangland, terrorist crime, crime of smuggling, crime of corruption or bribery, crime of disrupting the financial management order, crime of financial fraud, etc. as well as the proceeds generated therefrom, yet commits any of the following acts for the purpose of disguising or concealing the origin or nature thereof, the incomes obtained from the commission of the aforementioned crimes as well as the proceeds generated therefrom shall be confiscated, and the offender shall be sentenced to fixed-term imprisonment of not more than five years or detention, and/or shall be imposed a fine of 5% up to 20% of the amount of laundered money. If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years, and shall be imposed a fine of 5% up 20% of the amount of laundered money:

(1)Providing any capital account;

(2)Assisting the transfer of property into cash, financial instruments, or negotiable securities;

(3)Assisting the transfer of capital by means of transfer accounts or any other means of settlement;

(4)Assisting the remit of funds to overseas;

(5)Disguising or concealing the origin or nature of any crime-related income or the proceeds generated therefrom by any other means. [As Amended on 29 June 2006]

[Preceding formulation: Whoever, while clearly knowing that the funds are proceeds illegally obtained from drug-related crimes or from crimes committed by mafias or smugglers or from terrorist crimes and gains derived therefrom, commits any of the following acts in order to cover up or conceal the source or nature of the funds shall, in addition to being confiscated of the said proceeds and gains, be sentenced to fixed-term imprisonment of no more than five years or criminal detention, and shall also, or shall only, be fined no less than 5% but no more than 20% of the amount of money laundered; if the circumstances are serious, he shall be sentenced to fixed-term imprisonment of no less than five years but no more than ten years, and shall also be fined no less than 5% but no more than 20% of the amount of money laundered:

(I) providing fund accounts;

(II) helping exchange property into cash or any financial negotiable instruments;

(III) helping transfer capital through transferring accounts or any other form of settlement;

(IV) helping remit funds to the outside of the territory of China;

(V) covering up or concealing by any other means the source or nature of the illegally obtained proceeds and the gains derived therefrom.]

Where an entity commits the crime as mentioned in the preceding paragraph, it shall be fined, and any of the persons who are directly in charge and the other persons who are directly responsible for the crime shall be sentenced to fixed-term imprisonment of no more than five years or criminal detention; if the circumstances are serious, any of them shall be sentenced to fixed-term imprisonment of no less than five years but no more than ten years [As amended on 29 December 2001]

[Preceding formulation: Whoever commit any of the acts below to cover up or withhold the source or nature of what one knows is obtained from narcotics crimes, organized crimes of the underworld, or crimes of smuggling, or gains obtained through such crimes, are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and are to be in addition or exclusively sentenced to a fine not less than 5 percent and not more than 20 percent of the amount of money laundered, and the gains obtained through committing the crimes mentioned above are to be confiscated; when the circumstances are serious, the sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment and a fine not less than 5 percent and not more than 20 percent of the amount of money laundered:

(1) providing funds accounts;
(2) assisting to turn money and goods into cash or financial instruments;
(3) assisting to transfer funds through transferring accounts, or other ways of settling accounts;
(4) assisting to remit funds abroad; and
(5) other ways to cover up and withhold what is illegally obtained through committing crimes, and the nature and sources of such gains.

Institutions which commit a crime mentioned in the preceding paragraph are to be sentenced to a fine, and personnel in charge directly responsible for the crime and other personnel directly responsible for the crime are to be sentenced to not more than five years of fixed-term imprisonment or criminal detention
.]


Section 5. Crimes of Financial Fraud

Article 192. Whoever for the purpose of illegal possession illegally raises funds by fraudulent means, if the amount is quite big, is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and to a fine of not less than 20,000 yuan and not more than 200,000 yuan; when the amount is enormous or other circumstances are serious, the sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan; when the amount is especially enormous or other circumstances are especially serious, the sentence is to be not less than 10 years of fixed-term imprisonment or life imprisonment, and a fine not less than 50,000 yuan and not more than 500,000 yuan or confiscation of property.

Article 193. Whoever for the purpose of illegal possession commits any of the following acts to defraud the banks or other monetary institutions of loans, if the amount is quite big, is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and a fine of not less than 20,000 yuan and not more than 200,000 yuan; when the amount is enormous or other circumstances are serious, the sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment and a fine of not less than 50,000 yuan and not more than 500,000 yuan; when the amount is especially enormous or other circumstances are especially serious, the sentence is to be not less than 10 years of fixed-term imprisonment or life imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan, or confiscation of property:

(1) cooking up false reasons for importing funds or projects;
(2) using false economic contracts;
(3) using false certificates;
(4) using false property right certificates for guarantee or making duplicate guarantee exceeding the value of the mortgaged goods; and
(5) defrauding loans by other means.

Article 194. Whoever commits any of the following acts to carry out fraudulent activities with financial bills, if the amount is quite big, is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and to a fine of not less than 20,000 yuan and not more than 200,000 yuan; when the amount is enormous, or other circumstances are serious, the sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan; when the amount is especially enormous or other circumstances are especially serious, the sentence is to be not less than 10 years of fixed-term imprisonment or life imprisonment and a fine of not less than 50,000 yuan and not more than 500,000 yuan, or confiscation of property:

(1) knowingly using forged, altered drafts, cashier’s checks, and checks;
(2) knowingly using voided drafts, cashier’s checks, checks;
(3) uttering other people’s drafts, cashier’s checks, checks;
(4) signing a dud check or a check with signature different from the specimen one;
(5) issuing drafts or cashier’s checks without guaranteed funds, or making false records in issuing drafts or cashier’s checks to defraud money and goods.

Whoever uses forged and altered documents of authority for collection, remittance documents, bank certificates of deposit, and other bank documents of settlement is to be punished in accordance with the stipulations of the preceding paragraph.

Article 195. Whoever uses one of the following ways for fraudulent activities with letters of credit is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and a find of not less than 20,000 yuan and not more than 200,000 yuan; when the amount is enormous or other circumstances are serious, the sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan; when the amount is especially enormous or other circumstances are especially serious, the sentence is to be not less than 10 years of fixed-term imprisonment or life imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan or confiscation of property:

(1) using forged or altered letters of credit or bills and documents attached;
(2) using voided letters of credit;
(3) obtaining letters of credit by fraud; and
(4) carrying out fraudulent activities with letters of credit in other ways.

Article 196.
Anyone who commits fraud by means of a credit card in any of the following ways shall, if the amount involved is relatively large, be sentenced to fixed-term imprisonment of not more than 5 years or criminal detention and shall be concurrently or separately fined 20,000 yuan up to 200,000 yuan; if the sum involved is huge, or if there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of 5 up to 10 years and shall be concurrently fined 50,000 yuan up to 500,000 yuan; if the sum involved is extremely huge, or if there are other extremely serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than 10 years or life imprisonment and shall be concurrently fined 50,000 yuan up to 500,000 yuan or be sentenced to confiscation of all personal property:

(1) using a forged credit card or using a credit card obtained by using false identity certification;

(2) using an invalidated credit card;

(3) illegally using another’s credit card; or

(4) overdrawing with ill intentions.

The phrase "overdrawing with ill intentions" as mentioned in the preceding paragraph means that a credit card holder who, for the purpose of illegal possession, overdraws beyond the limited amount or beyond the time limit and refuses to repay the overdrawn amount after the bank that issues the card demands him to do so.

Anyone who steals a credit card and uses it shall be convicted and punished in accordance with the provisions in Article 264 of this Law.
[As amended on 28 February 2005]

[Preceding formulation: Whoever uses one of the following ways to carry out fraudulent activities with a credit card, if the amount is quite big, is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and a fine of not less than 20,000 yuan and not more than 200,000 yuan; if the amount is enormous or other circumstances are serious, the sentence is to be not less than five years and not more than 10 years of fixed-term imprisonment, and a fine of not less than 50,000 yuan and not more than 500,000 yuan; if the amount is especially big, or other circumstances are especially serious, the sentence is to be not less than 10 years of fixed-term imprisonment or life imprisonment, and a fine not less than 50,000 and not more than 500,000 yuan, or confiscation of property:
(1) using a forged credit card;
(2) using a voided credit card;
(3) uttering other people’s credit card; and
(4) overdrawing with evil intention.
The so-called overdrawing with evil intention mentioned in the preceding paragraph means that the card holder, for the purpose of illegal possession, overdraws exceeding the limit of overdrawn account or the time limit, and refuses to return the money after the card-issuing bank demands for the return.

Whoever steals a credit card and uses it is to be sentenced and punished in accordance with the stipulations of Article 264 of this law.
]


Article 197. Whoever uses a relatively substantial amount of forged or altered treasury bills or other negotiable securities issued by the state to engage in fraudulent activities shall be sentenced to not more than five years of fixed-term imprisonment or criminal detention and be fined no more than 200,000 yuan but no less than 20,000 yuan; when the amount is large and other serious circumstances are involved, the sentence shall be no more than 10 years but no less than five years of fixed-term imprisonment and a fine of no more than 500,000 yuan but no less than 50,000 yuan; and when the amount is extraordinarily large and other especially serious circumstances are involved, the sentence shall be life imprisonment or no less than 10 years of fixed-term imprisonment and a fine of no more than 500,000 yuan but no less than 50,000 yuan, or confiscation of property.

Article 198. Fraudulent insurance activities falling under any one of the following circumstances shall, for cases involving relatively large amounts be punished with imprisonment or criminal detention of less than five years, with a fine of over 10,000 yuan but less than 100,000 yuan; for cases involving large amounts, or of a serious nature, with imprisonment of over five years but less than 10 years, with a fine of over 20,000 yuan but less than 200,000 yuan; for cases involving extraordinarily large amounts, or of a serious nature, with imprisonment of over 10 years, with a fine of over 20,000 yuan but less than 200,000 yuan, or with forfeiture of property:

(1) policy holder intentionally fabricates insurance object to deceive insurance money;
(2) policy holder, the insured, or the beneficiary fabricates false causes to insurance incident or inflate the extent of loss to deceive insurance money;
(3) policy holder, the insured, or the beneficiary fabricate non-existing insurance incident to deceive insurance money;
(4) policy holder, the insured, or the beneficiary intentionally create an insurance incident with property loss to deceive insurance money; or
(5) policy holder or the beneficiary intentionally causes the death, injury, or sickness of the insured to deceive insurance money.
Acts falling under preceding Paragraphs (4) and (5) which constitute other crimes shall be punished for all offenses committed.

Units violating Paragraph (1) shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished with imprisonment or criminal detention of less than five years; for cases involving large amounts, or of a serious nature, with imprisonment of over five years but less than 10 years; for cases involving extraordinarily large amounts, with imprisonment of over five years but less than 10 years; or, in cases involving an extraordinary large amount, or of a serious nature, with imprisonment of over 10 years.

Appraisers, certifiers, and property valuers, who intentionally provide false evidence to abet others to commit fraud, shall be punished as insurance fraudulence accomplices.

Article 199. Offenders of Articles 192, 194, and 195 of this section that cause extraordinarily heavy losses to the interests of the state and the people shall be sentenced to life imprisonment or death, with forfeiture of property.

Article 200. Units committing offenses under Articles 192, 194, and 195 of this section shall be punished with a fine, with personnel directly in charge and other directly responsible personnel being punished with imprisonment or criminal detention of less than five years; for cases involving large amounts, or of a serious nature, with imprisonment over five years and less than 10 years; for cases of extraordinary large amount, or of a serious nature, with imprisonment of over 10 years or life imprisonment.

Section 6. Offenses Against Tax Collection and Management

Article 201.
Where any taxpayer files false tax returns by cheating or concealment or fails to file tax returns, and the amount of evaded taxes is relatively large and accounts for more than 10 percent of payable taxes, he shall be sentenced to fixed-term imprisonment not more than three years or criminal detention, and be fined; or if the amount is huge and accounts for more than 30 percent of payable taxes, shall be sentenced to fixed-term imprisonment not less than three years but not more than seven years, and be fined.

Where any withholding agent fails to pay or fails to pay in full the withheld or collected taxes by cheating or concealment, and the amount is relatively large, he shall be punished under the preceding paragraph.

Where either of the acts described in the preceding two paragraphs is committed many times without punishment, the amount shall be calculated on an accumulated basis.

Where any taxpayer who committed the act as described in paragraph 1 has made up the payable taxes and paid the late fine after the tax authority sent down the notice of tax recovery according to law, and has been administratively punished, he shall not be subject to criminal liability, except one who has been criminally punished in five years for evading tax payment or has been, twice or more, administratively punished by the tax authorities. [As amended on 28 February 2009]

[Preceding formulation: Tax payers found guilty of forging, altering, concealing, or indiscriminately destroying accounts books, entry proofs, or making unsubstantiated expenditures, or failing to enter or enter lower income items, or failing to submit tax returns after being notified by the tax authorities, or submitting a false return, or failing to pay taxes or pay less, or evading taxes exceeding 10 percent but less than 30 percent of payable taxes, or evading taxes again after two administrative sanctions for tax evasion, shall be punished with imprisonment or criminal detention of less than three years, with a fine of over 100 percent but less than 500 percent of the evaded tax amount; for cases with evaded tax amount exceeding 30 percent of payable taxes, or exceeding 100,000 yuan, with imprisonment of over three years but less than seven years, with a fine of over 100 percent but less than 500 percent of the evaded tax amount.

Withholding agents using the preceding means to refuse payment and full payment of withheld or collected taxes, which are over 10 percent of payable taxes or over 10,000 yuan, shall be punished in accordance with the preceding paragraph.

Multiple commissions of the acts mentioned in the two preceding paragraphs without detection shall be calculated on an accumulated basis.]

Article 202. Using violence or threatening means to refuse payment of tax shall be punished with imprisonment or criminal detention of less than three years, with a fine of over 100 percent but less than 500 percent of the amount of taxes so refused to pay; for cases of a serious nature, with imprisonment of over three years but less than seven years, with a fine of over 100 percent but less than 500 percent of the amount of taxes so refused to pay.

Article 203. Taxpayers who fail to settle payable taxes, or transfer or conceal property resulting in tax organs being unable to recover the owed taxes of over 10,000 yuan but less than 100,000 yuan, shall be punished with imprisonment or criminal detention of less than three years, with a fine or a separately imposed fine of over 100 percent and less than 500 percent of the unsettled amount; if the amount in question exceeds 100,000 yuan, with imprisonment of over three years but less than seven years, with a fine of over 100 percent but less than 500 percent of the unsettled amount.

Article 204. Using false export reports or other fraudulent means to defraud state export tax refunds involving a relatively large amount shall be punished with imprisonment or criminal detention of less than five years, with a fine of over 100 percent but less than 500 percent of the defrauded tax refund; for cases involving large amounts or of a serious nature, with imprisonment of over five years but less than 10 years, with a fine of over 100 percent but less than 500 percent of the defrauded tax refund; for cases involving extraordinarily large amounts, or of a especially serious nature with imprisonment of over 10 years or life imprisonment, with a fine of over 100 percent but less than 500 percent of the defrauded tax refund, or with forfeiture of property.

Tax payers using the fraudulent means mentioned in preceding paragraph to deceptively reclaim their paid taxes shall be convicted and punished according to provisions of Article 201, with those who deceptively claim more than what they have paid, being punished according to provisions of the preceding paragraph.

Article 205. Falsely issuing exclusive value-added tax invoices or other invoices to defraud export tax refunds or to off set taxes shall be punished with imprisonment or criminal detention of less than three years, with a fine of over 20,000 yuan and less than 200,000 yuan; for cases involving relatively large amounts of falsely reported taxes, or of a serious nature, with imprisonment of over three years and less than 10 years, with a fine of over 50,000 yuan but less than 500,000 yuan; for cases involving large amounts of falsely reported taxes, or of a more serious nature, with imprisonment of over 10 years or life imprisonment, with a fine of over 50,000 yuan but less than 500,000 yuan, or with forfeiture of property.
Committing acts mentioned in the preceding paragraph to defraud state taxes shall, if the amount involved is extraordinarily large, and of a especially serious nature that causes particularly heavy losses to the state, be punished with life imprisonment or death, and with forfeiture of property.
Units committing offenses under this article shall be punished with a fine, with personnel directly in charge or other directly responsible personnel being punished with imprisonment of criminal detention of less than three years; for cases involving relatively large amounts of taxes, or with a serious nature, with imprisonment of over three years but less than ten years; for cases involving large amounts of taxes, or of a especially serious nature, with imprisonment of over 10 years or life imprisonment.
Falsely issuing exclusive value-added tax invoices or other invoices to defraud export tax refunds or to off set taxes refers to any false issuance intended for others or himself, or letting others falsely issue for him, or induce others to falsely issue.

Legislative interpretations to this article: 全国人大常委会关于《中华人民共和国刑法》有关出口退税、抵扣税款的其他发票规定的解释



Article 206. Forging or selling forged exclusive value- added tax invoices shall be punished with imprisonment or criminal detention of or restriction for less than three years, with a fine of over 20,000 yuan but less than 200,000 yuan; for cases involving relatively large quantities, or of a serious nature, with imprisonment of over three years and less than 10 years, with a fine of over 50,000 yuan but less than 500,000 yuan; for cases involving large quantities or of a especially serious nature, with imprisonment of over ten years or life imprisonment, with a fine of over 50,000 yuan but less than 500,000 yuan, or with forfeiture of property.

Committing forgery and the sale of forged exclusive value-added invoices in extraordinarily large quantities or of a especially serious nature that severely disrupt economic order shall be punished with life imprisonment or death, with forfeiture of property.

Units committing offenses under this article shall be punished with a fine, with personnel directly in charge or other directly responsible personnel being punished with imprisonment or criminal detention, or restriction for less than three years; for cases involving relatively large quantities or of a serious nature, with imprisonment of over three years but less than 10 years; for cases involving large quantities or of a especially serious nature, with imprisonment of over 10 years or life imprisonment.

Article 207. Committing illegal sale of exclusive value-added tax invoices shall be punished with imprisonment or criminal detention, or restriction for less than three years, with a fine over 20,000 yuan but less than 200,000 yuan.; for cases involving relatively large quantities, with imprisonment over three years but less than 10 years, with a fine of over 50,000 yuan but less than 500,000 yuan; for cases involving large quantity with imprisonment of over 10 years or life imprisonment, with a fine of over 50,000 yuan but less than 500,000 yuan, or with forfeiture of property.

Article 208. Illegal purchase of exclusive value-added tax invoices or forged exclusive value-added tax invoices shall be punished with imprisonment or criminal detention of less than five years, with a fine or a separately imposed fine of over 20,000 yuan and less than 200,000 yuan.
Falsely issuing or reselling illegally purchased exclusive value-added tax invoices or forged exclusive value-added tax invoices shall be convicted and punished respectively under Articles 205, 206, and 207 of this law.

Article 209. Forging or manufacturing without authority or selling or manufacturing without authority other invoices usable for defrauding export tax refunds or offsetting taxes shall be punished with imprisonment or criminal detention and restriction for less than three years, with a fine of over 20,000 yuan but less than 200,000 yuan; for cases involving large quantities, with imprisonment of over three years but less than seven years, with a fine of over 50,000 yuan but less than 500,000 yuan; for cases involving extraordinarily large quantities, with imprisonment of over seven years, with a fine of over 50,000 yuan but less than 500,000 yuan, or with forfeiture of property.

Forging or manufacturing without authority or selling other invoices manufactured without authority, which have not been mentioned in the preceding paragraph, shall be punished with imprisonment or criminal detention of, or restriction for less than two years, with a fine of over 10,000 yuan but less than 50,000 yuan; for cases of a serious nature, with imprisonment of over two years and less than seven years, with a fine of over 50,000 yuan and less than 500,000 yuan.

Illegal sale of other invoices usable for defrauding export tax refunds or offsetting taxes shall be punished according to the first paragraph. Illegal sale of other invoices not mentioned in the third paragraph shall be punished according to the second paragraph.

Article 210. Theft of exclusive value-added tax invoices or other invoices usable in defrauding export tax refunds or offsetting taxes, shall be convicted and punished according to Article 264 of this law. Obtaining by fraudulent means exclusive value-added tax invoices or other invoices usable in defrauding export tax refunds or offsetting taxes shall be convicted and punished according to Article 266 of this law.

Article 211. Units committing offenses under Articles 201, 203, 204, 207, 208, and 209 of this section shall be punished with fines, with personnel directly in charge and other directly responsible personnel being punished according to these articles, respectively.

Article 212 Fines and forfeitures of property imposed against offenders convicted under Articles 201 through 205 of this section should not be enforced until the tax authorities have recovered the taxes in question and the export tax refunds so defrauded.

Section 7. Infringement of Intellectual Property Rights

Article 213. Using an identical trademark on the same merchandise without permission of its registered owner shall, if the case is of a serious nature, be punished with imprisonment or criminal detention of less than three years, with a fine, or a separately imposed fine; for cases of a more serious nature, with imprisonment of over three years and less than seven years, and with fine.

Article 214. Knowingly selling merchandise under a faked trademark with a relatively large sales volume shall be punished with imprisonment or criminal detention of less than three years, with a fine or a separately imposed fine; in cases involving a large sales volume, with imprisonment of more than three years but less than seven years, and with fine.

Article 215. Forging or manufacturing without authority or selling or manufacturing without authority other’s registered trademarks or identifications shall, for cases of a serious nature, be punished with imprisonment or criminal detention, or restriction for less than three years, with a fine or a separately imposed fine; for cases of a especially serious nature, with imprisonment of over three years and less than seven years, and with fine.

Article 216. Whoever counterfeits other people’s patents, and when the circumstances are serious, is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine.

Article 217. Whoever, for the purpose of reaping profits, has committed one of the following acts of copyright infringement and gains a fairly large amount of illicit income, or when there are other serious circumstances, is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine; when the amount of the illicit income is huge or when there are other particularly serious circumstances, he is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine:

(1) copy and distribute written, musical, movie, televised, and video works; computer software; and other works without the permission of their copyrighters;
(2) publish books whose copyrights are exclusively owned by others;
(3) duplicate and distribute audiovisual works without the permission of their producers;
(4) produce and sell artistic works bearing fake signatures of others.

Article 218. Whoever, for the purpose of reaping profits, knowingly sells the duplicate works described in Article 217 of this Law, and gains a huge amount of illicit income, is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine.

Article 219. Whoever engages in one of the following activities which encroaches upon commercial secrets and brings significant losses to persons having the rights to the commercial secrets is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine; or is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine, if he causes particularly serious consequences:

(1) acquire a rightful owner’s commercial secrets via theft, lure by promise of gain, threat, or other improper means;
(2) disclose, use, or allow others to use a rightful owner’s commercial secrets which are acquired through the aforementioned means;
(3) disclose, use, or allow others to use, in violation of the agreement with the rightful owner or the rightful owner’s request of keeping the commercial secrets, the commercial secrets he is holding.

Whoever acquires, uses, or discloses other people’s commercial secrets, when he knows or should know that these commercial secrets are acquired through the aforementioned means, is regarded as an encroachment upon commercial secrets.

The commercial secrets referred to in this article are technical information and operation information that are unknown to the public, can bring economic profits to their rightful owners, are functional, and are kept as secrets by their rightful owners.

The rightful owners referred to in this Article are owners of the commercial secrets and users who have the permission of the owners.

Article 220. When a unit commits the crimes stated in Article 213 through Article 219, it is to be sentenced to a fine; its directly responsible person in charge and other personnel of direct responsibility should be punished in accordance with the stipulations respectively stated in these Articles of this section.

Section 8. Crimes of Disrupting Market Order

Article 221. Whoever fabricates and spreads falsified information to impair other people’s commercial reputation and commodity reputation, and causes significant losses to others or if there are other serious circumstances, is to be sentenced to not more than two years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine.

Article 222. Where, in violation of the state regulations, an advertisement owner, advertising agency, or advertisement carrier gives false publicity by taking the advantage of advertising a commodity or service, and when the circumstances are serious, he shall be sentenced to not more than two years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine.

Article 223. Where bidders submit tenders in collusion and harm the interests of persons inviting tenders or other bidders, and when the circumstances are serious, they shall be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine.

Where bidders and persons inviting tenders harm the legitimate interests of the state, collectives, and the public by colluding in the bidding, they are to be punished in accordance with the stipulations stated in the preceding paragraph.

Article 224. Whoever, for the purpose of illegal possession, uses one of the following means during signing or executing a contract to obtain property and goods of the opposite party by fraud, and when the amount of money is relatively large, is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine; or be sentenced to not less than three years and not more than 10 years of fixed-term imprisonment and a fine, if the amount of money is huge or there are other serious circumstances; or be sentenced to more than 10 years of fixed-term imprisonment or life imprisonment and a fine or confiscation of property, if the amount of money is particularly huge or there are other particularly serious circumstances:

(1) sign a contract in the name of a made-up unit or under somebody else’s name;
(2) use forged, altered, or invalid negotiable instruments or other false certificates of property rights as guaranties;
(3) fulfill small-amount contracts or partially fulfill the contract, instead of actually fulfilling the contract, to inveigle the opposite party into continuing to sign and fulfill the contract;
(4) go into hiding after receiving goods, payment, advance payment, or property as guaranty from the opposite party;
(5) defraud the opposite party’s property through other means.

Article 224 (bis) Whoever organizes or leads the pyramid selling activities to cheat the participants of property and disturb the economic and social order, in which, in the name of marketing commodities, providing services or any other business operation, the participants are required to obtain the qualification for participation by paying fees, purchasing commodities or services or any other means, the participants are classified into different levels according to a certain order, the calculation of remunerations or kickbacks to participants is directly or indirectly dependent on the number of persons recruited, and the participants are induced to continue or coerced into continuing recruiting others to participate, shall be sentenced to fixed-term imprisonment not more than five years or criminal detention, and be fined; or if the circumstances are serious, shall be sentenced to fixed-term imprisonment not less than five years, and be fined. [As added on 28 February 2009]

Article 225. Whoever, in violation of the state stipulations, has one of the following illegal business acts, which disrupts the market order and when the circumstances are serious, is to be sentenced to not more than five years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine not less than 100 percent and not more than 500 percent of his illegal income and, where the circumstances are particularly serious, be sentenced to not less than five years of fixed-term imprisonment and a fine not less than 100 percent and not more than 500 percent of his illegal income or the confiscation of his property:

(1) engage in the monopoly business or monopolized commodities stipulated in laws and administrative regulations, or other commodities whose purchase and sale are controlled, without permission;
(2) purchase and sell import-export licenses, certificates of origin, and operation permits or approved documents stipulated by other laws and administrative regulations;

(3) illegally operating the business of securities, futures or insurance, or illegally engaging in fund payment and settlement business, without the approval of the relevant competent departments of the state; [as amended on 29 February 2009]

[Preceding formulation of this clause: without permission from the competent authorities of the state, is engaged in the business of securities, futures or insurance." The third clause of the original Law shall be changed accordingly into the fourth clause [clause added on 25 December 1999]
(4) conduct other illegal business activities that seriously disrupt the market order.


Article 226. Whoever, by violence or coercion, forces others to purchase or sell commodities or provide or accept services is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine, if the circumstances are serious.

Article 227. Whoever forges or profiteers from forged train and ship tickets, stamps, or other valuable coupons, which involve a relatively large amount of money, is to be sentenced to not more than two years of fixed-term imprisonment, criminal detention or control, and may in addition or exclusively be sentenced to a fine not less than 100 percent and not more than 500 percent of the amount of the coupons; or, if a huge amount is involved, to not less then two years and not more than seven years of fixed-term imprisonment and a fine not less then 100 percent and not more than 500 percent of the amount of the coupons.
Whoever profiteers from train and ship tickets, when the circumstances are serious, is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention or control, and may in addition or exclusively be sentenced to a fine of not less than 100 percent and not more than 500 percent of the amount of the coupons.

Article 228. Whoever, for the purpose of seeking personal gain, violates the laws and regulations on land management by illegally transferring and profiteering from land use rights and when the circumstances are serious, is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, or may in addition or exclusively be sentenced to a fine of not less than five percent and not more than 20 percent of the money gained from illegally transferring or profiteering from land use rights or, when the circumstances are particularly serious, is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine of not less than five percent and not more than 20 percent of the money gained from illegally transferring or profiteering from land use rights.

Article 229. Where a person of intermediary organizations, who is in charge of asset assessment and examination, certificate examination, accounting, auditing, legal services, and other duties, intentionally provides false certificates, and when the circumstances are serious, he is to be sentenced to not more than five years of fixed- term imprisonment or criminal detention, and a fine. Where a person stated in the preceding paragraph extorts money and goods from others or illegally accepts money and goods from others to commit the aforementioned crime, and when the circumstances are serious, he is to be sentenced to not more than five years of fixed-term imprisonment or criminal detention, and a fine.

Where a person stated in the first paragraph of this article is seriously irresponsible and causes serious consequences by issuing certificates greatly inconsistent with the facts, he is to be sentenced to not more than three years of fixed-term imprisonment or criminal detention, and may in addition or exclusively be sentenced to a fine.

Article 230. Whoever violates the rules of the law on import-export commodity inspection by avoiding commodity inspection and, without authorization, selling and using imported goods or exporting exported goods without having them gone through inspection by commodity inspection authorities as required, and when the circumstances are serious, is to be sentenced to not more than three years of fixed-term imprisonment or criminal detention, and may in addition or exclusively be sentenced to a fine.

Article 231. Where a unit commits the crimes stated in Article 221 through Article 230 of this section, it should be sentenced to a fine and its directly responsible person in charge and other directly responsible personnel be punished according to the stipulations in these articles.

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