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The Interim Measures on Reserve Funds for Foreign Labor Service Cooperation, which was promulgated by the former Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance on November 27, 2001 (Order No.7 of the former Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance in 2001), is now amended as follows with a view to regulating the operations of the foreign economic cooperation enterprises, to protecting the lawful rights and interests of personnel sent abroad, and to further specifying the range of use and way of payment of the reserve funds for the foreign cooperation of labor service: I. Article 14 shall be amended as: "Enterprises engaging in foreign cooperation of labor service may pay reserve funds by cash or by letter of guarantee, and may not pay them by any other means including negotiable instruments or asset mortgage, etc.: (1) The term "letter of guarantee" in the present article refers to a demand and irrevocable guarantee of reserve funds which is opened by the enterprise in a state-owned commercial bank (hereinafter referred to the bank), according to a specified form (see the Annex) and based on the paying amount of the reserve funds checked and approved by the administrative department of commerce on the province level of the place where the enterprise is registered; (2) The enterprise must submit the original copy of the letter of guarantee of reserve funds to the administrative department of commerce on the province level of the place where it is registered for archival purposes; (3) If the enterprise decides to use the reserve funds, the administrative department of commerce on the province level shall claim for compensation in written form against the bank upon strength of the letter of guarantee of reserve funds of the responsible enterprise; (4) The enterprise shall provide a letter of guarantee produced by the bank which proves its full payment of the reserve funds when taking out the Operation License of Foreign Economic Cooperation of the People's Republic of China and going though the annual examination thereof; (5) The enterprise must go through the modification procedures of letter of guarantee with the bank within two months upon the strength of the Notice of Modification of Letter of Guarantee produced by the administrative department of commerce on the province level under any of the following circumstances: 1. The business scope of the enterprise changes; 2. The enterprise has not used the reserve funds for three consecutive years due to its good business operations, and the administrative department of commerce on the province level has approved through examination to reduce the amount of its reserve funds; 3. Where any enterprise which is approved to reduce the payment of reserve refunds, it makes up the full amount of the funds within two months; (6) If an enterprise terminates its operation of foreign labor service cooperation, the administrative department of commerce on the province level of the place where it is registered shall produce a written acknowledgement to the bank after the enterprise makes good arrangement for its contract workers sent abroad; (7) For the reserve funds paid by letter of guarantee, if the present article dose not specially provide for its use, reimbursement, management, supervision or administrative reconsideration resulting from such activities, the other provisions of the present measures shall apply; (8) If an enterprise that has already paid its reserve funds by cash changes its way of payment into that by letter of guarantee, the administrative department of commerce on the province level shall return both the principal and corresponding interest of the paid reserve funds to the enterprise within ten working days after receiving the letter of guarantee of the reserve funds submitted by the enterprise. " II. One paragraph shall be added into Article 17 as the second paragraph as follows: "If an enterprise can not compensate the losses of the contract workers according to the judgment of the People's court or the arbitral decision of the arbitration body, it may apply to use the reserve funds and the interest thereof to the administrative department of commerce on the province level of the place where it is registered, and shall submit the following materials: (1) an application for the use of reserve funds; and (2) the written judgment of the People's court and the written arbitral decision of the arbitration body. " III. The fourth paragraph of Article 18: "All foreign trade and economic cooperation administrations on the province level shall, after using any of its reserve funds, report to the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance for archival purposes, and shall send a written notice of such matter to the relevant enterprises. " shall be amended as follows: "The administrative department of commerce on the province level shall report to the Ministry of Commerce and the Ministry of Finance for archival purposes within ten working days after using the reserve funds, and shall send a written notice of such matter to relevant enterprises. " IV. The "Ministry of Foreign Trade and Economic Cooperation" shall be uniformly amended as the "Ministry of Commerce", and the "foreign trade and economic cooperation administration" shall be uniformly amended as the "administrative department of commerce". Annex: The Letter of Guarantee of Reserve Funds (omitted) |
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