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	PROVISIONS OF THE SUPREME PEOPLE'S COURT ON RELEVANT ISSUES CONCERNED IN THE TRIAL OF CASES INVOLVING LOANS PLEDGED WITH AN EXPORT TAX REBATE CUSTODY ACCOUNT

	(Announcement of the Supreme People's Court of the People's Republic of China (No. 18 [2004] of the Supreme People's Court), November 22, 2004: Passed at the 1326th Meeting of the Judicial Committee of the Supreme People's Court on September 27, 2004, the Provisions of the Supreme People's Court on Relevant Issues Concerned in the Trial of Cases Involving Loans Pledged with an Export Tax Rebate Custody Account are hereby promulgated and shall come into force as of December 7, 2004)


SUBJECT : LOANS PLEDGED WITH AN EXPORT TAX REBATE CUSTODY ACCOUNT
ISSUING DEPARTMENT : THE SUPREME PEOPLE'S COURT OF THE PEOPLE'S REPUBLIC OF CHINA
ISSUE DATE : 11/22/2004
IMPLEMENT DATE : 12/07/2004
LENGTH : 435 words
TEXT :

These Provisions are formulated in accordance with the General Principles of the Civil Law of the People's Republic of China, the Contract Law of the People's Republic of China and the Guarantee Law of the People's Republic of China and based on the people's courts' judicial practice for the purpose of properly handling cases involving loans pledged with a special export tax rebate account and safeguarding the legitimate rights and interests of the parties concerned.

Article 1. These Provisions shall apply to the trial and enforcement of cases involving loans pledged with a special export tax rebate account.

For the purpose of these Provisions, a loan pledged with a special export tax rebate account means a loan for which the borrower puts its special export tax rebate account in the custody of the lending bank with the tax rebate in the account as a guarantee of repayment of the loan.

Article 2. For a loan pledged with a special export tax rebate account, a pledged loan contract must be made in writing, which shall become effective when the borrower's special export tax rebate account is actually put in the custody of the lending bank.

Article 3. The bank granting a loan pledged with a special export tax rebate account shall have priority to claim upon the tax rebate in the pledge account.

Article 4. During the trial of or execution in a case, no people's court may adopt any preservation or enforcement measures to any export tax rebate in the pledge account.

Article 5. In the case of bankruptcy of the borrower, the lending bank shall have priority to claim upon the export tax rebate in the pledge account to the limit of the amount of the bank's pledged outstanding portion of the credit.

Article 6. Articles 3, 4 and 5 hereof shall not apply and the people's court may adopt preservation or enforcement measures, if:

(1) the borrower has deposited any fund other than the export tax rebate in its special export tax rebate account;

(2) the lending bank has had certain export tax rebate in the borrower's pledge account paid for another loan to the borrower, and the amount thus paid exceeds the amount of the pledged loan.

(3) the lending bank has agreed to put the special export tax rebate account to disposition of the tax authority; or

(4) the lending bank has committed any other act to the contrary of the special nature of a tax rebate account or bringing damage to the interests of other creditors.

Article 7. These Provisions shall come into force as of the date of promulgation.