JC Master Legal News Issue 972

Key Takeaways for This Issue
The China Securities Regulatory Commission has implemented a notification-and-commitment system for fourteen types of certification matters.
To thoroughly implement the major decisions and arrangements of the CPC Central Committee and the State Council, further advance the reform of “streamlining administration, delegating power, improving regulation, and optimizing services,” and enhance the business environment in the securities and futures markets, the China Securities Regulatory Commission has issued the “Implementation Plan of the China Securities Regulatory Commission on Promoting the Notification‑and‑Commitment System for Certification Matters” (hereinafter referred to as the “Plan”). In accordance with the principle of maximizing convenience for the public, the Plan applies the notification‑and‑commitment system to a total of fourteen certification matters related to relevant administrative procedures.
The National Equities Exchange and Quotations Company hosted a symposium for exchanges with the China Securities Regulatory Commission’s local bureaus and local financial regulators.
To further strengthen interaction and communication with the CSRC’s local branches and regional financial regulatory authorities, solicit their views and suggestions on the reform and development of the New Third Board market, and pool efforts to enhance capital market support for small and medium-sized enterprises, the National Equities Exchange and Quotations Company recently hosted exchange symposiums in Guangzhou and Xi’an, under the guidance of the CSRC’s Department of Public Companies. Officials from the Department of Public Companies, including its responsible leaders, along with Sui Qiang, General Manager of the National Equities Exchange and Quotations Company, and Chen Yongmin, Deputy General Manager, as well as nearly 100 relevant officials from 16 CSRC local branches and 28 provincial, municipal, and autonomous‑region financial bureaus, attended these events.
Announcement of the Ministry of Finance and the State Taxation Administration on Matters Relating to the Pre-Tax Deduction of Charitable Donations Made Through Public‑Benefit Mass Organizations
In order to implement the Enterprise Income Tax Law of the People’s Republic of China and its Implementing Regulations, as well as the Individual Income Tax Law of the People’s Republic of China and its Implementing Regulations, this announcement hereby sets forth matters relating to the pre‑tax deduction for charitable donations made to public‑interest mass organizations.
Opinions of the Ministry of Transport on Strict, Standardized, Impartial, and Civilized Law Enforcement
To effectively safeguard the legitimate rights and interests of transportation workers and promote the sustained, sound, and stable development of the transportation sector, we hereby put forward the following recommendations on strictly standardizing, impartially enforcing the law, and ensuring civilized law enforcement.

Finance & Capital Markets

The China Securities Regulatory Commission has implemented a notification-and-commitment system for fourteen types of certification matters.
To thoroughly implement the major decisions and arrangements of the CPC Central Committee and the State Council, further advance the reform of “streamlining administration, delegating power, improving regulation, and optimizing services,” and enhance the business environment in the securities and futures markets, the China Securities Regulatory Commission has issued the “Implementation Plan of the China Securities Regulatory Commission on Promoting the Notification‑and‑Commitment System for Certification Matters” (hereinafter referred to as the “Plan”). In accordance with the principle of maximizing convenience for the public, the Plan applies the notification‑and‑commitment system to a total of fourteen certification matters related to relevant administrative procedures.
The Plan specifies the scope of application, the workflow, and the detailed requirements for strengthening ongoing and post‑event supervision under the notification‑and‑commitment system. The notification‑and‑commitment system for certification matters will be officially implemented thirty days after the issuance of this Plan. Administrative matters subject to the notification‑and‑commitment system primarily include approvals for overseas public offerings and listings (including additional issuances) by joint‑stock companies, applications by securities offices for sponsor qualification approval, and approvals for the establishment of public fund management companies. The certification items involved mainly comprise certificates of tax compliance, business licenses, business qualification certificates, legal person status certificates, and academic degree certificates, among others.
Going forward, the China Securities Regulatory Commission will continue to refine and enhance its services, strengthen credit-based regulation, promptly draw on practical experience, gradually expand the scope of the notification-and-commitment system, and steadily boost the satisfaction and sense of gain among administrative counterparts.
CSRC Office Document No. 45 [2021]
Notice of the China Securities Regulatory Commission on Issuing the Implementation Plan for the Notification and Commitment System for Certification Matters
To all branch offices of the China Securities Regulatory Commission and to all departments within the Commission: The “Implementation Plan of the China Securities Regulatory Commission on Promoting the System of Notification and Commitment for Matters Requiring Certification” is hereby circulated to you. Please ensure its thorough implementation.
General Office of the China Securities Regulatory Commission
June 2, 2021
Implementation Plan of the China Securities Regulatory Commission on Promoting the Notification-and-Commitment System for Certification Matters In order to thoroughly implement the major decisions and arrangements of the CPC Central Committee and the State Council, further advance the reform of “streamlining administration and delegating power, combining regulation with oversight, and optimizing services,” and improve the business environment in the securities and futures markets, this plan has been formulated in accordance with the General Office of the State Council’s Guiding Opinions on Fully Implementing the Notification-and-Commitment System for Certification Matters and Business Operation Licensing Matters (Guobanfa [2020] No. 42), and taking into account the actual conditions of work in the securities and futures markets.
I. Scope of Implementation
(1) Overseas public offerings and listings of joint-stock companies (including additional share issuances); applications by securities offices for sponsor‑brokerage qualifications; applications to establish fund management companies; applications by asset management institutions to engage in fund management business; applications by investment consulting institutions to provide securities‑related services; applications by futures companies to conduct futures investment advisory services; filing requirements for the appointment of directors, supervisors, senior management personnel, and heads of branch offices of securities offices; filing for the establishment or acquisition of domestic branch offices by securities offices; filing for changes in the legal representative of a futures company; and filing for the establishment of domestic branch offices or changes in the heads of domestic branch offices—along with other administrative matters—shall be subject to the notification‑and‑commitment system for certain supporting documents (see appendix). Practical experience shall be promptly summarized, and the scope of implementation of the notification‑and‑commitment system shall be gradually expanded.
(2) For matters requiring certification that are subject to the notification‑and‑commitment system, applicants may freely choose whether to proceed under that system. If an applicant is unwilling or unable to make a commitment, they shall, in accordance with the law, submit the relevant supporting documentation and proceed through the standard procedures.
(3) Where an applicant has a serious record of poor credit or has previously made false commitments, the notification‑and‑commitment system shall not apply during the period prior to credit restoration or within the validity period of the unlawful and untrustworthy information.
II. Workflow
(1) Notification. For matters requiring certification that are subject to the notification‑and‑commitment system, if the applicant chooses to proceed under this system, the department or branch office responsible for handling the relevant administrative matter shall provide the applicant with the standard format of the notification‑and‑commitment form. The standard format shall include the name of the certification item, the legal basis for its establishment, the content of the certification, the manner in which the applicant makes the commitment, the civil, administrative, and criminal liabilities that may be incurred for making a false commitment, the supervisory authority’s power to conduct mid‑term and post‑event verification, whether the notification‑and‑commitment form will be made public, and the scope and time limit of such public disclosure.
(2) Applicant’s Commitment. Upon becoming aware of the content of the notice and commitment, the applicant who is willing to make such a commitment shall sign the Notice and Commitment Form, thereby conofficeing in writing that they have been informed of the relevant matters, meet the applicable conditions, that their expression of intent to commit is genuine, and that they are willing to assume the legal liabilities arising from any false commitments. The Notice and Commitment Form shall be prepared in duplicate, with one copy retained by the China Securities Regulatory Commission or its dispatched agency and the other by the applicant.
(3) Review and Decision. If an applicant chooses the notification‑and‑commitment approach to handle an administrative matter and makes the required commitments, no further supporting documentation shall be requested, and the matter shall be processed in accordance with the applicable procedures for that administrative item. Upon review by the relevant responsible department or its branch institution, if the applicant is found not to meet the conditions for applying the notification‑and‑commitment system, a written determination stating that the system is not applicable shall be issued, and the matter shall then be processed under the standard procedure.
III. Subsequent Supervision
(1) Strengthen mid‑ and post‑event verification. Based on the nature of the matters requiring certification, the applicant’s creditworthiness, risk profile, and other relevant factors, adopt a categorized approach to determine appropriate verification methods, clearly specifying the timing, criteria, and procedures for verification, as well as whether verification is waived. Where mid‑event verification is required, suitable methods such as on-site inspections, online checks via government service platforms, information‑sharing systems, credit information systems, designated websites of competent authorities, or self‑regulatory organization websites may be employed. For cases that can be verified ex post or exempted from verification, they shall be brought under routine regulatory oversight. When conducting on-site inspections, streamline workflows, enhance inter‑agency coordination, and minimize disruption to the applicant’s business activities. No discriminatory regulatory measures may be imposed on applicants who have obtained permits through the notification‑and‑commitment system. If, during verification or routine supervision, false commitments are discovered, the application shall be terminated in accordance with the law, the applicant shall be ordered to make corrections within a specified time limit, the administrative decision shall be revoked, or administrative penalties shall be imposed. Where criminal offenses are suspected, the case shall be referred to the judicial authorities in accordance with the law.
(2) Strengthen credit-based regulation. Enhance the institutional framework for the notification-and-commitment credit management system; when verification or routine supervision reveals false commitments, issue a formal determination and handling document identifying such false commitments as失信 information, incorporate them into the credit evaluation process, and record and aggregate them in the capital market’s integrity archive database. Relying on credit information-sharing platforms at all levels and industry-specific credit information systems, promote interconnectedness and sharing of credit information. Leverage the results of credit evaluations to implement differentiated service and regulatory measures, and, in accordance with the law, strengthen constraints on untrustworthy entities. Ensure, in compliance with laws and regulations, the protection of relevant information pertaining to the parties involved.
(3) Strengthen risk prevention. Develop risk‑mitigation measures tailored to the specific characteristics of certification requirements, thereby enhancing risk‑control capabilities. Establish a commitment‑withdrawal mechanism: prior to the completion of an administrative procedure, applicants may withdraw their commitment application and proceed under the original procedures if they have valid reasons. For certification matters that involve public interests, third‑party interests, or are particularly difficult to verify, the commitment letter shall be made publicly available to invite social oversight; if the applicant refuses such public disclosure, they must submit the required supporting documentation.
IV. Work Requirements
(1) The relevant responsible departments shall, in accordance with the overall requirements of this plan and in light of actual regulatory needs, systematically review and formulate, for each item subject to the notification‑and‑commitment system, the corresponding work procedures, as well as standardized templates for the notification‑and‑commitment form, the document certifying non‑applicability of the system, and the document for determining and handling cases of false commitments. They shall also clearly define verification methods and risk‑mitigation measures, and revise, update, and issue the relevant service guides. The departments or branch institutions responsible for accepting related administrative matters shall publicly display the standard format of the notification‑and‑commitment form at their service locations and on their websites. The notification‑and‑commitment system for proof‑required matters shall be officially implemented thirty days after the issuance of this plan.
(2) Relevant departments (units) shall, in strict accordance with the “Guiding Opinions of the General Office of the State Council on Fully Implementing the Notification and Commitment System for Matters Requiring Certification and Business Operation Licensing Matters” and the relevant requirements set forth in this Plan, carry out work related to the notification and commitment system for certification matters, ensure effective implementation, promptly address issues arising during the rollout of the system, and, as appropriate, summarize and replicate and promote exemplary practices throughout the system.
Attachment: Catalog of Matters Subject to the Commitment-Based Notification System of the China Securities Regulatory Commission

The China Securities Regulatory Commission has launched a special investor education campaign to pilot real estate investment trusts (REITs) in the infrastructure sector.
　To further enhance investor education and protection in the pilot program for real estate investment trusts (REITs) in the infrastructure sector, and to effectively safeguard the legitimate rights and interests of investors, the China Securities Regulatory Commission recently launched a special investor‑education campaign under the theme “Infrastructure REITs Are Here,” aiming to help investors develop a sound understanding of infrastructure REITs, manage expectations, and participate in investing in a rational and informed manner.
The activities will primarily comprise the following: First, providing investors with a detailed explanation of the pilot framework and operational mechanisms governing infrastructure REITs, ensuring they are fully informed of all regulatory and self-regulatory requirements. Second, conducting investor‑oriented expectation management and financial literacy initiatives, broadly disseminating knowledge about infrastructure REITs, highlighting associated risks, and enabling investors to gain a thorough understanding of the significance of advancing infrastructure REITs, objectively assess their investment returns and risks, and strengthen their awareness of prudent investing and risk mitigation.
This initiative will be grounded in investors’ actual needs, actively leverage the role of the media, and utilize a range of investor‑education tools—such as brochures and animated videos—as well as diverse activities—including seminars and forums, competitions and training sessions, on‑site visits to stock exchanges, brokerage branches, and bank outlets—to provide investors with free educational services and risk‑awareness guidance. By bringing knowledge about infrastructure REITs directly to investors, the initiative will lay the groundwork for the smooth advancement of the infrastructure REITs pilot program.

The China Securities Regulatory Commission has released the financial industry’s recommended standard, “Elements for the Introduction of Asset Management Products – Part 2: Securities and Futures Asset Management Plans and Related Products.”
　Recently, the China Securities Regulatory Commission issued the financial industry’s recommended standard “Elements of Asset Management Product Disclosure—Part 2: Securities and Futures Asset Management Plans and Related Products,” which takes effect from the date of its publication.
“Elements of Asset Management Product Disclosure—Part 2: Securities and Futures Asset Management Plans and Related Products,” a recommended financial industry standard (hereinafter referred to as the “Standard”), provides a unified overview, from the investor’s perspective, of the definitions, classifications, operational mechanisms, risks, and other essential elements of securities and futures asset management plans and related products. This enables investors to make timely and accurate assessments of the substantive risks associated with these products, helps them fully understand the risk‑return characteristics of such investments, effectively safeguards investor interests, and contributes to the stability of the financial market.
The standard establishes a unified framework for product disclosures applicable to asset management products, including securities and futures companies and their subsidiaries’ asset management plans, fund management companies and their subsidiaries’ private‑placement asset management plans, public mutual funds, and private‑placement securities investment funds. It sets forth general requirements for product disclosures, as well as detailed specifications for elements and content at each level, and provides standardized disclosure templates for securities and futures asset management plans and related products.
Going forward, the China Securities Regulatory Commission will continue to advance the informatization of the capital market, with a strong focus on strengthening foundational standards and steadily elevating the industry’s level of standardization.

Commercial & Corporate
The National Equities Exchange and Quotations Company hosted a symposium for exchanges with the China Securities Regulatory Commission’s local bureaus and local financial regulators.
To further strengthen interaction and communication with the CSRC’s local branches and regional financial regulatory authorities, solicit their views and suggestions on the reform and development of the New Third Board market, and pool efforts to enhance capital market support for small and medium-sized enterprises, the National Equities Exchange and Quotations Company recently hosted exchange symposiums in Guangzhou and Xi’an, under the guidance of the CSRC’s Department of Public Companies. Officials from the Department of Public Companies, including its responsible leaders, along with Sui Qiang, General Manager of the National Equities Exchange and Quotations Company, and Chen Yongmin, Deputy General Manager, as well as nearly 100 relevant officials from 16 CSRC local branches and 28 provincial, municipal, and autonomous‑region financial bureaus, attended these events.
At the exchange symposium, representatives from various securities regulatory bureaus engaged in in-depth discussions on topics such as further deepening the reform of the New Third Board, routine supervision and services for listed companies, and enhancing the level of technology‑driven regulation, while also putting forward relevant suggestions. Representatives from local financial authorities, drawing on their respective regional contexts, shared best practices in providing enterprise services and facilitating company listings and financing, and offered recommendations on strengthening publicity for the New Third Board and building supporting infrastructure, improving listed companies’ sense of gain, boosting the professional enthusiasm of intermediary institutions, and reinforcing coordination and cooperation between the New Third Board and regional equity markets. Meanwhile, training instructors from the National Equities Exchange and Quotations Company, law offices, and other organizations delivered specialized presentations on subjects including the implementation status of the comprehensive deepening of New Third Board reforms, refining and elevating the Select Tier to support the innovation and development of small and medium‑sized enterprises, and capital market development in the context of the new Securities Law.
Going forward, the National Equities Exchange and Quotations Company will continue to strengthen communication and collaboration with CSRC branch offices and local financial regulators, thereby empowering small and medium-sized enterprises to achieve high-quality development. First, it will enhance its localized service capabilities by co‑establishing bases with local governments, aligning with government‑driven industrial priorities, and exploring the creation of specialized “specialized, refined, distinctive, and innovative” enterprise incubation hubs to better support national strategic objectives. Second, it will provide robust enterprise‑support services: focusing on “specialized, refined, distinctive, and innovative” offices for new entrants, while offering tailored “butler‑style” services to existing companies; and delivering region‑specific, precision‑targeted training to help enterprises develop customized capital‑market development plans. Third, it will vigorously cultivate specialized intermediaries by continuing to grant additional points to securities offices engaged in New Third Board business, strengthening training and exchanges among intermediary institutions, and providing dedicated guidance to key securities offices, accounting offices, and other entities actively involved in New Third Board activities. Fourth, it will deepen integration with regional markets by steadily advancing pilot programs for regional market innovation under the unified coordination of the CSRC, expanding the scope of these pilots, diversifying cooperation models, establishing New Third Board service stations in regional markets, enhancing personnel exchanges and institutional alignment, and accelerating the process by which regional enterprises can access the New Third Board.

Notice on the Regulatory Oversight of Companies Listed on the New Third Board and Relevant Entities, May 2021
In May 2021, the National Equities Exchange and Quotations Company imposed disciplinary sanctions on four violations and adopted self-regulatory measures in response to 54 violations. Among these, 45 violations were subject to verbal warnings, while 9 violations were addressed through written self-regulatory measures. The specific details are as follows:
I. Disciplinary Actions
First, Shenzhen Wanfang Network Co., Ltd. (hereinafter referred to as “ST Wanfang”) made preliminary corrections to accounting errors on January 22, 2021, adjusting its 2017 net profit by RMB 5.8176 million, its 2017 equity attributable to the parent company by RMB 5.8381 million, its 2018 net profit by RMB –75.3560 million, and its 2018 equity attributable to the parent company by RMB –71.4072 million. The respective adjustment rates were 11.64%, 19.44%, 350.74%, and 1,137.16%. ST Wanfang’s aforementioned violations of information disclosure requirements, coupled with the failure of then‑Chairman Li Jianwen and other relevant responsible parties to perform their duties with due diligence and loyalty, constitute breaches of the relevant provisions of the “Business Rules of the National Equities Exchange and Quotations for Small and Medium‑Sized Enterprises (Trial)” (hereinafter referred to as the “Business Rules”) and the “Information Disclosure Rules for Listed Companies of the National Equities Exchange and Quotations for Small and Medium‑Sized Enterprises” (hereinafter referred to as the “Information Disclosure Rules”). In accordance with applicable regulations, our company has imposed disciplinary sanctions in the form of public criticism on ST Wanfang and other relevant responsible parties.
Second, on October 21, 2020, Shenzhen Junfeng Mulinwang Technology Co., Ltd. (hereinafter referred to as “Mulinwang”) acquired a 60% equity interest in a certain company held by its actual controller and chairman, Li Jiyong. Upon completion of this transaction, Mulinwang held a 60% stake in the target company, with a subscribed capital of RMB 119,400 million, representing 1,688.15% and 1,589.62% of Mulinwang’s total assets and net assets, respectively, as of the end of the audited fiscal year 2019. Mulinwang failed to timely fulfill the relevant procedures for major asset restructuring and its information disclosure obligations, while Li Jiyong and other responsible parties did not perform their duties with due diligence and loyalty. These actions violated the provisions of the Measures for the Administration of Major Asset Restructuring of Non‑Listed Public Companies, the Business Rules, the Information Disclosure Rules, the Governance Rules for Listed Companies on the National Equities Exchange and Quotations System, and the Detailed Rules for Major Asset Restructuring of Non‑Listed Public Companies on the National Equities Exchange and Quotations System. In accordance with applicable regulations, our company has imposed disciplinary sanctions in the form of public criticism on Mulinwang and other relevant responsible parties.
Third, between June and July 2018, Liu Chongdao, the actual controller and then-chairman of Hunan Lide Technology Co., Ltd. (hereinafter referred to as “Lide Technology”), entered into an agreement with a certain asset management company, under which the asset management company was tasked with selling shares of Lide Technology held by the controlling shareholder, Hunan Lide Industrial Group Co., Ltd. (hereinafter referred to as “Lide Group”). The relevant shares were held in nominee capacity by Lide Group, while Lide Technology participated in processes such as conofficeing shareholder identities and issuing share certificates, and issued a “Shareholder Identity Conofficeation Letter” to investors. From July to October 2018, Lide Technology, through a certain intermediary agency, concluded “Stock Issuance Subscription Agreements” with relevant investors, with the related shares again held in nominee capacity by Liu Chongdao. Lide Technology failed to disclose these equity changes in a timely manner, nor did it fulfill the requisite procedures for reviewing stock issuances and making disclosures; moreover, the practice of nominee shareholding resulted in unclear ownership of the listed company. Lide Group and other responsible parties likewise failed to perform their duties with due diligence and loyalty. These actions violated the relevant provisions of the Measures for the Supervision and Administration of Non‑Listed Public Companies, the Business Rules, the Information Disclosure Rules, the Trial Business Rules for Stock Issuance on the National Equities Exchange and Quotations System for Small and Medium‑Sized Enterprises, and the Rules on Targeted Stock Issuance on the National Equities Exchange and Quotations System for Small and Medium‑Sized Enterprises. In accordance with applicable regulations, our company has imposed disciplinary sanctions in the form of public criticism on Lide Technology and other responsible parties.
Fourth, Shaanxi Ziguang New Energy Technology Co., Ltd. (hereinafter referred to as “Ziguang New Energy”) failed to disclose in a timely manner one material litigation arising in 2017, one material litigation arising in 2018, and two material litigations arising in 2020. Ziguang New Energy’s failure to promptly disclose multiple material litigations, coupled with the failure of then‑Board Secretary Zhang Lei and other relevant responsible parties to perform their duties with due diligence and loyalty, constitutes a violation of the relevant provisions of the Business Rules and the Information Disclosure Rules. In accordance with applicable regulations, our company has imposed disciplinary sanctions in the form of public censure on Ziguang New Energy and other relevant responsible parties, and has adopted the self‑regulatory measure of issuing a warning letter to Zhang Lei.
II. Status of Imposing Written Self-Regulatory Measures
In May, the violations subject to written self-regulatory measures fell into two categories: information disclosure violations and corporate governance violations.
With respect to violations of information disclosure requirements, the following issues have been identified: first, listed companies failed to promptly disclose material information that was required to be disclosed, such as details of significant litigation; second, acquirers did not timely disclose the acquisition report, the financial advisor’s professional opinion, or the legal opinion; third, certain responsible parties at listed companies engaged in nominee shareholding arrangements, resulting in unclear equity ownership and non‑compliant information disclosure; and fourth, listed companies failed to publish an announcement on the implementation of equity distribution prior to the record date.
With respect to corporate governance violations, first, a listed company failed to promptly comply with the deliberation procedures and information disclosure obligations when providing guarantees; second, the listed company altered the intended use of raised funds, diverting them to prohibited purposes.
The National Equities Exchange and Quotations Company, guided by the principles of “establishing sound systems, non‑interference, and zero tolerance,” diligently fulfills its frontline regulatory duties, continuously strengthens self‑regulatory oversight, and steadily enhances both the operational quality of the New Third Board market and the standardized practices of market participants. It resolutely imposes regulatory measures against violations, effectively safeguards investors’ legitimate rights and interests, and ensures the healthy and orderly development of the New Third Board market.

Taxation TAXATATION

Announcement of the Ministry of Finance and the State Taxation Administration on Matters Relating to the Pre-Tax Deduction of Charitable Donations Made Through Public‑Benefit Mass Organizations
Announcement No. 20 of 2021 by the Ministry of Finance and the State Taxation Administration
In order to implement the Enterprise Income Tax Law of the People’s Republic of China and its Implementing Regulations, as well as the Individual Income Tax Law of the People’s Republic of China and its Implementing Regulations, the following announcement is hereby made regarding the pre‑tax deduction for charitable donations made through public‑interest mass organizations:
I. Donations made by enterprises or individuals through public‑interest mass organizations to charitable and public‑welfare causes that comply with applicable laws shall be deductible when calculating taxable income in accordance with tax laws.
II. The public‑interest and charitable undertakings referred to in Article 1 of this Announcement shall comply with the provisions set forth in Article 3 of the Law of the People’s Republic of China on Donations to Public‑Interest Undertakings, or with the provisions in Article 3 of the Charity Law of the People’s Republic of China regarding the scope of charitable activities.
III. The public‑interest mass organizations referred to in Article 1 of this Announcement include people’s organizations that, pursuant to the Regulations on the Registration and Administration of Social Organizations, are exempt from registration, as well as social organizations approved by the State Council to be exempt from registration (hereinafter collectively referred to as “mass organizations”), provided that they have, in accordance with the prescribed conditions and procedures, obtained qualification for pre‑tax deduction of charitable donations.
IV. Public-interest organizations seeking qualification for pre-tax deduction of charitable donations must simultaneously meet the following conditions:
(1) It meets the conditions set forth in Items 1 through 8 of Article 52 of the Implementing Regulations of the Enterprise Income Tax Law;
(2) The organizational and staffing departments at or above the county level directly manage the organizational and staffing matters of their respective units.
(3) Income from donations and expenditures funded by such donations shall be accounted for separately, and, for the three consecutive years immediately preceding the application, the proportion of total donation income allocated to public‑interest and charitable activities shall not be less than 70%.
V. The conofficeation of eligibility for pre‑tax deduction of charitable donations shall be carried out in accordance with the following provisions:
(1) Mass organizations whose organizational structure and staffing are directly managed by the central institutional establishment authorities shall submit relevant materials to the Ministry of Finance and the State Taxation Administration.
(2) Mass organizations whose organizational structures and staffing are directly managed by the local institutional establishment departments at or above the county level shall submit relevant materials to the finance and tax authorities of the province, autonomous region, municipality directly under the central government, and cities separately listed in the national plan.
(3) For eligible public‑interest mass organizations, the lists shall be jointly published by the Ministry of Finance and the State Taxation Administration, as well as by the finance and tax authorities of provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan, each according to the aforementioned administrative authority. During the year to which the list pertains, charitable donations made by enterprises and individuals to the mass organizations on the list may be deducted from taxable income in accordance with the relevant regulations.
(4) The entities eligible for pre‑tax deduction of charitable donations include:
1. Public-interest mass organizations whose pre-tax deduction eligibility for charitable donations will expire at the end of the current year;
2. Mass organizations that have had their pre-tax deduction eligibility for public-interest donations revoked but have subsequently regained compliance with the relevant requirements;
3. Mass organizations that have not yet obtained, or have lost after the termination of their qualification, the eligibility for pre‑tax deduction of public‑interest donations.
(5) By the end of each year, the fiscal and tax authorities at or above the provincial level shall, within their respective jurisdictions, complete the verification of eligibility for pre‑tax deduction of charitable donations and publish the corresponding list. Furthermore, in accordance with the different categories of review subjects specified in paragraph (4) of this Article, they shall separately set forth the lists and the effective dates of eligibility for pre‑tax deduction of charitable donations.
VI. The materials required to be submitted pursuant to Article 5 of this Announcement shall be filed no later than June 30 of the year in which the application is made, and shall include:
(1) Application Report;
(2) The “Three Determinations” regulations issued by Party committees, governments, or institutional establishment departments at or above the county level;
(3) Articles of Association;
(4) For the three years immediately preceding the application, submit documentation on the sources and utilization of donated funds, financial reports, detailed records of charitable activities, and either an audit report issued by a certified public accountant or a tax compliance review report (or attestation report) prepared by a certified public accountant, a registered tax advisor, or an attorney.
VII. The qualification for pre-tax deduction of charitable donations is valid nationwide and has a validity period of three years.
For the first scenario set forth in Item (4) of Article 5 of this Announcement, the eligibility for pre‑tax deduction of charitable donations shall be effective as of January 1 of the year following the date of publication of the list. For the second and third scenarios specified in Item (4) of Article 5 of this Announcement, such eligibility shall be effective as of January 1 of the year in which this Announcement is issued.
8. If, for the preceding three years, the proportion of total donations received by a public-interest mass organization that is allocated to public welfare and charitable causes falls below 70%, its eligibility for pre-tax deductions on charitable donations shall be revoked.
9. If a public‑interest mass organization falls under any of the following circumstances, its eligibility for pre‑tax deduction of charitable donations shall be revoked, and it shall be ineligible to have its qualification re‑afofficeed during the year of revocation and for the subsequent three years:
(1) Accepting donations in violation of applicable regulations, including imposing conditions that confer benefits on the donor, engaging in profit‑making activities under the guise of donation, using charitable donations to promote tobacco products or products and matters whose promotion is prohibited by law, or accepting donations that are inconsistent with public‑interest purposes or contravene social morality;
(2) Engaging in activities that contravene the organization’s articles of association, or using donated funds for purposes other than those specified in the articles of association;
(3) When determining the purpose and beneficiaries of donated property, designating a specific beneficiary who has a clear conflict of interest with either the donor or the management personnel of the public‑interest organization;
(4) Those who have been subject to administrative penalties (excluding warnings or fines of less than RMB 10,000 imposed in a single instance).
For public-interest mass organizations falling under any of the circumstances set forth in paragraphs (1), (2), and (3) of this Article, corporate income tax shall be levied retroactively on their donation income and other sources of income in accordance with the law.
X. If a public-interest mass organization falls under any of the following circumstances, its eligibility for pre‑tax deduction of charitable donations shall be revoked, and it shall not be re‑certified:
(1) Engaged in illegal political activities;
(2) Engaging in or funding activities that endanger national security or the public interest.
XI. Public‑interest mass organizations that have obtained the qualification for pre‑tax deduction of charitable donations shall, within 15 days from the date on which they no longer meet any of the conditions set forth in Article 4 of this Notice or fall under any of the circumstances specified in Articles 8, 9, or 10 of this Notice, report to the competent tax authority. With respect to public‑interest mass organizations whose pre‑tax deduction qualification for charitable donations is to be revoked, the relevant provincial‑level or higher fiscal and tax authorities shall verify the pertinent information and, in accordance with their respective powers, promptly issue a public announcement listing the entities whose qualifications have been revoked. Effective from the month following the date of such announcement, the concerned public‑interest mass organizations shall no longer be entitled to the pre‑tax deduction for charitable donations.
XII. When accepting donations, public-interest mass organizations shall, in accordance with their administrative hierarchy, use donation receipts for public welfare purposes that are supervised and sealed by the Ministry of Finance or the financial departments of provinces, autonomous regions, and municipalities directly under the central government, and affix their official seal to such receipts. They shall also issue donation receipts upon request from individuals.
Enterprises or individuals that claim a pre‑tax deduction for qualifying charitable donations shall retain the relevant receipts for record‑keeping purposes.
13. Unless otherwise provided, when public-interest mass organizations receive donations from enterprises or individuals, the amount of the donation shall be recognized in accordance with the following principles:
(1) For monetary asset donations received, the donation amount shall be recognized at the actual amount received.
(2) For non-monetary asset donations received, the donation amount shall be recognized at fair value. When making a donation to a public‑interest mass organization, the donor shall provide documentation specifying the fair value of the non‑monetary assets donated; if such documentation cannot be provided, the recipient shall not issue a donation receipt to the donor.
14. To facilitate inquiries by taxpayers, fiscal and tax authorities at or above the provincial level shall promptly publish on their official websites announcements listing public-interest mass organizations that are qualified to claim pre-tax deductions for charitable donations.
Enterprises or individuals may use the aforementioned channels to verify the eligibility and validity period of public-interest donations made by mass organizations for pre-tax deduction purposes.
XV. This Announcement shall take effect as of January 1, 2021. The “Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Pre-Tax Deduction of Public‑Benefit Donations Made Through Public‑Benefit Mass Organizations” (Cai Shui [2009] No. 124) is hereby repealed simultaneously.
To ensure smooth policy alignment, for mass organizations whose eligibility for pre‑tax deduction of charitable donations for 2020 and earlier years has not yet been conofficeed, fiscal and tax authorities at all levels shall continue to apply the original policy provisions. For mass organizations whose eligibility for pre‑tax deduction of charitable donations expired at the end of 2020, their eligibility for the 2021–2023 period shall be deemed to have commenced on January 1, 2021.
This is hereby announced.
Ministry of Finance, State Taxation Administration
June 2, 2021

Litigation & Arbitration

Opinions of the Ministry of Transport on Strict, Standardized, Impartial, and Civilized Law Enforcement
Ministry of Transport
Opinions of the Ministry of Transport on Strict, Standardized, Impartial, and Civilized Law Enforcement
(Jiaofa Fa [2021] No. 53)
To effectively safeguard the legitimate rights and interests of transportation workers and promote the sustained, sound, and stable development of the transportation sector, the following guidelines are hereby issued to ensure strict, standardized, impartial, and civilized law enforcement.
I. General Requirements
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and thoroughly implementing Xi Jinping’s Thought on the Rule of Law, we take building a transportation system that satisfies the people as both our starting point and ultimate goal. We will address the fundamental questions of whom we enforce the law for and what values we seek to uphold in law enforcement; uphold the principle of law enforcement for the people; adopt a problem‑oriented approach; and emphasize positive guidance. We will strive to transform our law‑enforcement mindset, optimize enforcement methods, standardize enforcement conduct, enhance professional competence, maintain strict discipline in law enforcement, strengthen oversight and accountability, and effectively elevate the governance capacity and level of the transportation sector, thereby providing robust legal safeguards for accelerating the development of a strong transportation nation.
II. Officely Establish the Principle of Law Enforcement for the People
(1) Prioritize political development. Consciously arm ourselves with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, regard upholding political principles as the primary requirement, strengthen the “Four Consciousnesses,” officely uphold the “Four Confidences,” and ensure the “Two Safeguards.” Strengthen our ideals and convictions, enhance our political judgment, political comprehension, and political execution, and ensure that the law enforcement force is loyal, clean, and responsible. Earnestly implement the requirements of advancing the specialized legal profession toward revolutionization, standardization, professionalism, and career‑orientation; conduct in-depth education on core socialist values and the concept of socialist rule of law; and always remain loyal to the Party, the country, the people, and the law.
(II) Effectively transform law enforcement concepts. Place greater emphasis on safeguarding the legitimate rights and interests of transportation professionals, uphold a people-centered stance, and integrate the principle of law enforcement for the people into every stage and aspect of the enforcement process. Attach greater importance to fairness and justice, regarding the maintenance of social equity and justice as the lifeline and core value of law enforcement, and strive to ensure that the public experiences fairness and justice in every enforcement activity and in the handling of each case. Further emphasize the critical role of law enforcement in regulating market order, ensuring safe development, and promoting social stability, and deepen efforts to advance rigorous, standardized, impartial, and civilized law enforcement as a key component of enhancing transportation governance capacity and standards, and accelerating the building of a strong transportation nation.
(3) Optimize and improve law enforcement practices. Adhere to the principle of proportionality between penalties and violations, ensuring that administrative penalties are commensurate with the facts, nature, circumstances, and social harm caused by the unlawful act. Eliminate excessive enforcement and minimize the impact of administrative law enforcement on the normal business operations of market entities. In accordance with the law, intensify enforcement against serious violations that endanger public life and health. Implement a policy of non‑penalization for first‑time minor infractions: where an offense is minor, promptly rectified, and has not resulted in any harmful consequences, no administrative penalty shall be imposed. For first‑time offenses with minor adverse effects that are promptly corrected, after providing admonishment and education, administrative penalties may also be waived in accordance with the law. Uphold the combination of punishment and education, promote reasoned law enforcement, and rigorously implement the “who enforces, who educates” responsibility system for legal publicity. Proactively disclose one’s identity as an enforcer, the facts of the violation, and the legal basis for the penalty; conduct reasoned enforcement, promptly correct unlawful conduct, and strengthen educational guidance for the parties involved, resolutely preventing the practice of substituting fines for effective management or simply imposing a fine and closing the case. Integrate service‑oriented approaches into law enforcement, embedding measures that facilitate and benefit the public into enforcement activities. Guide market entities to operate in compliance with the law, eliminate potential violations, reduce legal risks, and prevent and curtail unlawful behavior at its source, ensuring that transportation professionals experience both the officeness and the human touch of law enforcement.
III. Striving to Cultivate a Strong and Rigorous Law-Enforcement Style
(4) Uphold sound professional ethics. Implement the “Code of Professional Ethics for Administrative Law Enforcement Personnel in the Transportation Sector” (Appendix 1), adhering to the principle of integrating rule of law with moral governance. Guide law enforcement personnel to internalize and embody the professional ethical spirit of loyalty, integrity, responsibility, dedication, conscientiousness, impartiality, and self-discipline, thereby genuinely strengthening their sense of professional identity, pride, and accountability, and enhancing their enthusiasm and initiative in serving transportation practitioners, the general public, and the accelerated development of a strong transportation nation.
(5) Strictly uphold enforcement discipline. Implement the “Prohibition on Administrative Law Enforcement in Transport” (Appendix 2), treating it as a core work discipline and an ironclad constraint. Require law enforcement personnel to rigorously abide by Party discipline and state laws, fortify their ideological defenses against corruption and degeneration, strengthen their awareness of discipline and rules, and reinforce bottom-line thinking and red-line consciousness. Resolutely curb all unhealthy practices and malpractices that have drawn strong public concern, and adopt a zero-tolerance approach to officely investigate and prosecute all forms of corruption—such as abuse of power and seeking personal gain through official position—during the enforcement process. Impose disciplinary sanctions under Party and administrative regulations in accordance with the law, and strive to build a transport‑related administrative law enforcement team that ensures compliance with orders and strict adherence to prohibitions.
(6) Uphold strict enforcement discipline. Implement the “Regulations on Enforcement Discipline in Transport Administration” (Appendix 3), comprehensively standardizing law enforcement officers’ uniforms, appearance and conduct, language use, and internal management; combat unhealthy work styles such as complacency, laziness, and laxity; and eliminate prominent problems including lax discipline, uncivilized language, perfunctory attendance without due diligence, and being present at work but not fully engaged. Establish and refine operational mechanisms for routine patrols, on‑duty monitoring, emergency response, and other tasks; strengthen oversight and inspection; proactively accept public scrutiny; and cultivate a new image for the transport administration enforcement corps.
IV. Effectively Standardize Law Enforcement Practices
(7) Strictly adhere to law enforcement procedures. Fully implement the newly revised Administrative Penalty Law of the People’s Republic of China and the Regulations on Administrative Law Enforcement Procedures in the Transport Sector; in light of actual conditions, formulate or amend relevant supporting systems and update administrative penalty documents. Strictly observe statutory time limits for case handling to prevent protracted delays. Conduct administrative inspections in accordance with the law; refrain from conducting redundant inspections at multiple levels or by multiple authorities, exceed the scope or authority of inspections, or interfere with the normal production and business activities of the inspected entities. Collect evidence lawfully, promptly, objectively, and comprehensively, and impose administrative penalties on parties in accordance with the law when the facts are clearly established and the evidence is sufficiently gathered. Improve the systems for legal review and collective deliberation of major enforcement decisions, clearly defining the reviewing bodies and procedures, and preventing the substitution of formal reviews with joint signatures or of collective deliberations with verbal consultations, thereby ensuring that these systems do not become mere formalities. Fully safeguard the parties’ rights to make statements and defenses, to a hearing, and to seek redress; properly preserve and handle seized or confiscated property in accordance with the law; protect the privacy and personal information of the parties in compliance with the law; and effectively ensure that the legitimate rights and interests of the parties remain inviolable.
(8) Standardize the exercise of administrative enforcement discretion. Provincial transportation authorities shall, in light of local conditions and the catalog of comprehensive enforcement matters, formulate and refine rules and benchmarks for discretionary decision‑making, thereby providing support for precise and meticulous law enforcement. Discretionary benchmark rules must integrate both subjective and objective criteria, comprehensively assessing factors such as the social harm caused by the violation, the degree of the party’s subjective fault, the specific manifestations of the unlawful conduct, and the measures and outcomes of rectification, so as to refine discretionary standards, narrow the scope of discretion, and effectively prevent arbitrary enforcement.
(9) Administer administrative enforcement and evidence‑registration‑and‑preservation measures in accordance with the law and with due care. Implement administrative enforcement measures such as sealing and impoundment strictly in compliance with the powers, conditions, and procedures prescribed by the Administrative Enforcement Law of the People’s Republic of China; no administrative enforcement measure may be implemented, or implemented in disguised form, without authorization by laws or regulations. Where non‑coercive means can achieve the objectives of administrative management, no administrative enforcement measure shall be imposed. Evidence‑preliminary registration‑and‑preservation measures must be carried out strictly in accordance with the law, with rigorous adherence to internal review and approval procedures; the scope of objects subject to such measures may not be expanded.
(10) Organize the review and rectification of unreasonable penalty provisions. Conduct a comprehensive review of laws, administrative regulations, departmental rules, and normative documents in the transportation sector that involve administrative penalties, thereby eliminating and addressing the problem of arbitrary fines at the source. Regularly carry out evaluations of penalty provisions, and promptly, within the scope of legislative authority, either independently or by recommending to the competent authorities, amend or repeal those provisions found through such evaluations to be manifestly disproportionate, lacking specificity and practicality, or no longer aligned with the needs of economic and social development.
V. Strengthening the Fundamentals of Grassroots Law Enforcement
(11) Enhancing the rule of law competence. Thoroughly study and deeply understand Xi Jinping’s Thought on the Rule of Law, making it a mandatory component of refresher training for law enforcement personnel. Focusing on leading cadres—the “key minority”—we will comprehensively implement systems such as requiring leaders of integrated administrative law enforcement agencies to study and apply the law, mandating that members of leadership teams undergo legal education each quarter, having leaders in charge of rule-of-law work deliver regular legal lectures, and requiring principal officials to report on their performance, integrity, and adherence to the law at year-end. We will also ensure that resources for rule-of-law training are directed toward the front lines of law enforcement; provincial transportation authorities shall coordinate local legal‑education faculty, organize legal scholars, lawyers, and core professionals to visit grassroots enforcement stations, providing tailored, customized legal‑education services to frontline officers and effectively enhancing their rule-of-law competence.
(12) Enhance professional competence. With the goal of elevating the standardization of law enforcement, continuously strengthen the overall professional capabilities of the enforcement workforce. The Ministry shall organize phased and batch‑wise training for heads of grassroots integrated enforcement agencies, while provincial transportation authorities and directly affiliated maritime administration bodies shall conduct comprehensive, rotating professional training for all enforcement personnel within their respective regions and systems. Such rotational training must be both goal‑oriented and problem‑oriented, with a focus on addressing knowledge gaps among enforcement officers. A long‑term mechanism for enforcement officer training should be established to cultivate multidisciplinary, cross‑sectoral, and cross‑specialty integrated enforcement professionals, promote deep integration across different functional areas, and ensure that enforcement personnel’s professional competencies progressively meet the demands of comprehensive administrative law enforcement practice.
(13) Strengthen on-the-job training. Closely identify the shortcomings and weak areas in law enforcement practice, focusing on on-site inspections, evidence collection and investigation, emergency response, and case file preparation, and intensify full-process, on-site simulation exercises. Develop tailored training plans by position and age group, and organize one-on-one exchanges between seasoned professionals, model enforcers, and frontline officers to facilitate mentorship and knowledge transfer. Enhance the provision of law enforcement equipment at the grassroots level and strengthen training in the proper use of basic tools, ensuring that every officer is proficient in operating essential equipment such as body-worn cameras, handheld radios, and computers, with regular assessments conducted. Officers who fail these assessments shall undergo off-duty retraining and be temporarily suspended from administrative law enforcement duties.
VI. Strict Law Enforcement Supervision and Disciplinary Accountability
(14) Strengthen internal oversight. Strictly implement the “three systems” for administrative law enforcement, ensuring that all procedural information is fully recorded and that the entire enforcement process is subject to traceable management. Fully leverage the supervisory role of internal review and approval procedures for enforcement cases; heads of enforcement agencies must earnestly fulfill their principal responsibility for review and approval, rigorously scrutinizing key stages and measures—including case filing and registration, investigation and evidence collection, determination of unlawful facts, and administrative coercive measures—to ensure that cases are handled in accordance with the law and in a standardized manner, and that decisions are objective and impartial. Make effective use of accountability mechanisms: any suspected issues—such as arbitrary fines, unlawful enforcement, abuse of power for personal gain, dereliction of duty, or trading power for money—shall be referred to the relevant authorities for serious investigation and prosecution in accordance with applicable regulations.
(15) Strengthen hierarchical oversight. Deepen the implementation of the administrative law enforcement evaluation and assessment system in the transportation sector, refine the evaluation indicator and assessment frameworks for law enforcement and case handling, and adopt a combined approach of routine inspections and special‑purpose audits, as well as overt monitoring and undercover investigations. Emphasize identifying and rectifying problems to continuously enhance the scientific rigor, accuracy, and guiding orientation of law enforcement assessments. Further leverage assessment outcomes by disseminating best practices and promptly addressing underperforming units and individuals through corrective measures, admonitory talks, public criticism, or reassignment. Higher‑level authorities shall closely track and supervise issues identified during law enforcement evaluations, conduct timely follow‑up reviews, ensure thorough remediation, and promote self‑supervision, self‑improvement, self‑reform, and self‑purification within the transportation administrative law enforcement workforce.
(16) Ensure unimpeded public oversight. Further advance the openness and transparency of law enforcement by promptly and accurately disclosing, in accordance with the law, information on enforcement responsibilities, legal bases, case-handling procedures, and channels for supervision and reporting. Broaden public oversight channels, enhance the functionality and service quality of the 12328 hotline, and ensure smooth access through government websites, WeChat official accounts, mobile apps, and other platforms. Appoint public supervisors, distribute law-enforcement evaluation cards, and proactively accept oversight from the general public and society at large. Improve the mechanism for handling and providing feedback on public input: for prominent issues in the field of law enforcement raised by the public, adopt an immediate‑response, immediate‑resolution approach, promptly investigate and verify the matters, and communicate the outcomes; strive to resolve every case and provide a response to every concern. For frequently reported matters and problems, conduct thorough root‑cause analysis, identify the underlying causes, formulate practical and feasible corrective measures, and establish sound, long‑term governance frameworks and working mechanisms.
All provincial transportation authorities, directly affiliated maritime administration agencies, the Yangtze River Navigation Administration, and the Pearl River Navigation Administration are requested to promptly report to the Ministry on the progress of implementing these guidelines. The Ministry will promptly summarize and disseminate exemplary achievements, best practices, and typical cases from across regions and sectors, and, based on implementation outcomes, make dynamic adjustments to the “Code of Professional Ethics for Transportation Administrative Law Enforcement Personnel,” the “Prohibitions on Transportation Administrative Law Enforcement,” and the “Code of Conduct for Transportation Administrative Law Enforcement Personnel.”
Ministry of Transport
June 4, 2021
　

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