Asset Appraisal Law of the People's Republic of China

Asset Appraisal Law of the People's Republic of China

Order of the President
(No. 46)

The Asset Appraisal Law of the People's Republic of China, as adopted at the 21st Session of the Standing Committee of the Twelfth National People's Congress of the People's Republic of China on July 2, 2016, is hereby issued and shall come into force on December 1, 2016.

President of the People's Republic of China: Xi Jinping
July 2, 2016

Asset Appraisal Law of the People's Republic of China
(Adopted at the 21st Session of the Standing Committee of the Twelfth National People's Congress of the People's Republic of China on July 2, 2016)

Table of Contents
Chapter I General Provisions
Chapter II Appraisal Professionals
Chapter III Appraisal Institutions
Chapter IV Appraisal Procedures
Chapter V Industry Associations
Chapter VI Supervision and Administration
Chapter VII Legal Liability
Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is developed for purposes of regulating asset appraisal, protecting the lawful rights and interests of the parties to asset appraisal and public interest, promoting the sound development of the asset appraisal industry, and maintaining the order of socialist market economy.

Article 2 For the purpose of this Law, “asset appraisal” (hereinafter referred to as “appraisal”) means the professional services of an appraisal institution and its appraisal professionals, including the assessment and estimates of immovable property, movable property, intangible assets, enterprise value, asset loss or other economic benefits based on authorization and issuance of appraisal reports.

Article 3 Where a natural person, legal person or any other organization needs to determine the value of the appraisal object, it or he may voluntarily authorize an appraisal institution to conduct appraisal.
Where the matters involving state-owned assets or public interest, among others, are subject to appraisal in accordance with laws and administrative regulations (hereinafter referred to as “statutory appraisal”), an appraisal institution shall be legally authorized to conduct appraisal.

Article 4 An appraisal institution and its appraisal professionals shall conduct business in accordance with laws, administrative regulations and appraisal standards, and observe the principles of independence, objectivity and impartiality.
The appraisal institution and its appraisal professionals that conduct business in accordance with the law shall be protected by law.

Article 5 Appraisal professionals that conduct appraisal shall join an appraisal institution, and may conduct business only in one appraisal institution.

Article 6 Industry associations may be legally formed in the appraisal industry based on specialties, conduct self-discipline management, and accept the supervision of the relevant appraisal administrative department and social supervision.

Article 7 The relevant appraisal administrative department of the State Council shall, according to its functions, conduct supervision and administration of the appraisal industry within its administration region.
The relevant appraisal administrative department of the local people's government at or above the level of a districted city shall, according to its functions, conduct supervision and administration of the appraisal industry within its administrative region.

Chapter II Appraisal Professionals

Article 8 Appraisal professionals include appraisers and other appraisal practitioners with professional appraisal knowledge and practical experience.
“Appraisers” means appraisal professionals that have passed the appraiser qualification examination. The state shall determine the specialties of appraisers based on the requirements of economic and social development.

Article 9 The relevant national appraisal industry association shall organize the national uniform appraiser qualification examination according to the provisions of the state.
Citizens that have an educational background of junior college or above may participate in the national uniform appraiser qualification examination.

Article 10 The relevant national appraisal industry association shall announce the list of appraisers on its website, and update the list in real time.

Article 11 Whoever has been given a criminal punishment due to intentional crime or criminal negligence in appraisal, finance, accounting and auditing activities shall not conduct appraisal if it has not been five years since the date of completion of the sentence.

Article 12 Appraisal professionals shall have the following rights:
(1) Requiring the principal to provide the relevant ownership certificate, financial accounting information and other materials, and necessary assistance required for the implementation of fair appraisal procedures.
(2) Consulting documents, certificates and materials required for conducting business from the relevant state authority or any other organization in accordance with the law.
(3) Rejecting illegal intervention in the appraisal and appraisal result of the principal or any other organization or individual.
(4) Signing appraisal reports in accordance with the law.
(5) Other rights prescribed by laws and administrative regulations.

Article 13 An appraisal professional shall perform the following obligations:
(1) Having good faith, and legally conducting business in an independent, objective and impartial manner.
(2) Abiding by appraisal standards, performing investigation functions, conducting independent analysis and estimates, and conducting business in a diligent and prudential manner.
(3) Completing required continuing education, and maintaining and improving professional capability.
(4) Checking and verifying the authenticity, accuracy and integrity of relevant documents, certificates and materials used in appraisal activities.
(5) Keeping confidential state secrets, trade secrets and personal privacy to which he or she has access in appraisal activities.
(6) Disqualifying himself or herself if he or she is an interested person with respect to the principal or any other relevant party or the appraisal object.
(7) Accepting the self-discipline management of the industry association, and performing the obligation prescribed by the articles of association of the industry association.
(8) Performing other obligations prescribed by laws and administrative regulations.

Article 14 An appraisal professional shall not commit any of the following conduct:
(1) Accepting authorization in private to conduct business and charging fees.
(2) Conducting business at two or more appraisal institutions at the same time.
(3) Soliciting business by illicit means such as fraud, inducement or coercion, or disparaging or defaming any other appraisal professional.
(4) Permitting any other person to conduct business in his or her own name, or conducting business by illegally using any other person's name.
(5) Signing any appraisal report on business not undertaken by him or her.
(6) Demanding, accepting or demanding or accepting in any disguised form remuneration and property other than those agreed upon in contracts, or seeking other illicit benefits.
(7) Signing any false appraisal report or any other appraisal report with material omission.
(8) Committing any other conduct in violation of any law or administrative regulation.

Chapter III Appraisal Institutions

Article 15 An appraisal institution shall adopt the form of partnership or corporate in accordance with the law, and retain appraisal professionals to conduct appraisal.
An appraisal institution of the partnership form shall have two or more appraisers. Two thirds or more of its partners shall be appraisers who have three or more years of work experience and have not been given the punishment of suspending practice in the last three years.
An appraisal institution of the corporate form shall have eight or more appraisers and two or more shareholders, of whom two thirds or more shareholders shall be appraisers who have three or more years of work experience and have not been given the punishment of suspending practice in the last three years.
Where an appraisal institution has two partners or shareholders, two partners or shareholders shall be appraisers who have three or more years of work experience and have not been given the punishment of suspending practice in the last three years.

Article 16 Whoever forms an appraisal institution shall file a registration application with the administrative department for industry and commerce. The appraisal institution shall undergo recordation formalities at the relevant appraisal administrative department within 30 days of receipt of the business license. The appraisal administrative department shall announce to the public the recordation of appraisal institutions in a timely manner.

Article 17 An appraisal institution shall, in accordance with the law, conduct business in an independent, objective and impartial manner, establish and improve quality control rules, and guarantee that appraisal reports are objective, true and rational.
The appraisal institution shall establish and improve internal management rules, oversee its appraisal professionals' compliance with laws, administrative regulations and appraisal standards, and be responsible for their practicing activities.
The appraisal institution ......