Article 62 Where a foreign bank's representative office terminates its activities at its own discretion, it shall effect its closure upon approval of the banking regulatory agency of the State Council, and shall go through procedures for the cancellation of registration with the original registration organ within the statutory time limit.

Chapter VI Legal Liability

Article 63 Where a party, without approval of the banking regulatory agency of the State Council, establishes a foreign-funded bank or illegally engages in the activities within the business scope of a banking institution, the banking regulatory agency of the State Council shall have the power to have such a bank or activities banned. And within five years following the date of the ban, the banking regulatory agency of the State Council shall not accept the application submitted by the said party for establishing a foreign-funded bank. Where a crime is constituted, the criminal liability shall be investigated for according to law. Where no crime is constituted, the banking regulatory agency of the State Council shall confiscate the illegal income and impose a fine of one to five times the amount of the illegal income if the illegal income is more than 500,000 yuan. If there is no illegal income or the illegal income is less than 500,000 yuan (US$63,300), a fine of not less than 500,000 yuan and not more than 2 million yuan shall be imposed.

Article 64 Where an operational foreign-funded bank commits any of the following acts, the banking regulatory agency of the State Council shall order it to make corrections and confiscate its illegal income, if any; if the illegal income is more than 500,000 yuan, a fine of one to five times the amount of the illegal income shall be imposed thereupon; if there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan and not more than 2 million yuan shall be imposed thereupon. Where the circumstances are extremely serious or the operational foreign-funded bank fails to make corrections within the prescribe time limit, the banking regulatory agency of the State Council may order a suspension of its business for rectification or revoke its financial services permit. Where a crime is constituted, the criminal liability shall be investigated for according to law:

(1) establishing a branch without approval;

(2) being modified or terminated without approval;

(3) engaging in business activities without approval; or

(4) raising or lowering deposit interest rates or loan interest rates in violation of relevant requirements.

Article 65 Where a foreign-funded bank commits any of the following acts, the banking regulatory agency of the State Council shall order it to make corrections and impose thereupon a fine of not less than 200,000 yuan (US$25,300) and not more than 500,000 yuan; where the circumstances are extremely serious or the foreign-funded bank fails to make corrections within the time limit, the banking regulatory agency of the State Council may order a suspension of its business for rectification, revoke its financial services permit, or close its representative office; where a crime is constituted, the criminal liability shall be investigated for according to law:

(1) failing to comply with relevant provisions on information disclosure;

(2) refusing or impeding the supervision and inspection by the banking regulatory agency of the State Council;

(3) providing the financial and accounting reports, statements or other data that are false or in which important facts are concealed;

(4) concealing or destroying the documents, certificates, accounting books, electronic data or other materials needed in supervision and inspection;

(5) appointing a director, senior executive or chief representative without verification of the qualification; or

(6) refusing to implement the special supervisory measures defined in article 50 of these regulations.

1

2

3

4

5

6

7

8

9

10

11

12

(For more biz stories, please visit Industry Updates)