Order of the President of the People’s Republic of China

(No. 10)

The Amendment VII to the Criminal Law of the People’s Republic of China, which was adopted at the 7th session of the Standing Committee of the 11th National People’s Congress of the People’s Republic of China on February 28, 2009, is hereby promulgated and shall come into force on the date of promulgation.

President of the People’s Republic of China: Hu Jintao

February 28, 2009

Amendment (VII) to the Criminal Law of the People’s Republic of China

(adopted at the 7th session of the Standing Committee of the 11th National People’s Congress of the People’s Republic of China on February 28, 2009)

I. Paragraph 3 of Article 151 of the Criminal Law is amended as:

“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.”

II. Paragraph 1 of Article 180 of the Criminal Law is amended as:

“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.”

A paragraph is added as paragraph 4:

“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.”

III. Article 201 of the Criminal Law is amended as:

“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.”

IV. An Article is inserted after Article 224 of the Criminal Law as Article 224 (A):

“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.”