Draft Charity Law Second Hearing Revisions Draft

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Draft Charity Law Second Hearing Revisions Draft

In December 2015, the 18th meeting of the Standing Committee of the 12th NPC deliberated the the second reading draft of the Charity law, and decided to submit the draft to the fourth meeting of the National People's Congress for deliberation. Pursuant to the decision of the 18th session of the Standing Committee, the Law Committee and the Legislative Affairs Commission revised and perfected the second deliberation draft of the Charity Law according to the deliberative opinions of members of the Standing Committee and the opinions of all sectors. The Revised Second Deliberation Draft of the Charity Law is hereby published on the website of the NPC and is open to the public for comments. The public can directly log in to the NPC website (www.npc.gov.cn))and provide comments; and may also mail comments to the Legislative Affairs Committee of the Standing Committee of the National People's Congress, (1 West Qianmen Avenue, Xicheng District, Beijing 100805) [in Chinese: 北京市西城区前门西大街1号,邮编:100805. Please indicate on envelope Charity Law Revised Second Deliberation Draft Solicitation of Comments). Comments Deadline: January 31, 2016.

Charity Law of the People's Republic of China (Draft) (Revised Second Deliberation Draft)

Chapter I: General Provisions

Chapter II: Charitable Organizations

Chapter III: Charitable Fundraising

Chapter IV: Charitable Donations

Chapter V: Charitable Trusts

Chapter VI: Charitable Assets

Chapter VII: Charitable Services

Chapter VIII: Information Disclosure

Chapter IX: Promotional Measures

Chapter X: Oversight and Management

Chapter XI: Legal Responsibility

Chapter XII: Supplementary Provisions

 

Chapter I: General Provisions

Article 1: This law is drafted so as to develop the charity field, to promote a culture of charity, to regulate charitable activities; to protect the legal rights and interests of charitable organizations, donors, volunteers, and beneficiaries; and to promote social progress and share the developmental accomplishments.

Article 2: This law applies to natural persons, legal persons and other organizations carrying out charitable activities or activities related to charities.

Article 3: "Charitable activity" as used in this law indicates initiation of the following non-profit activities on a voluntary basis by natural persons, legal persons and other organizations through means such as donating assets or providing services, or voluntarily carrying out the following public interest activities:

(1) Poverty alleviation and assistance;

(2) Support for the elderly, orphaned, diseased or disabled;

(3) relief from damage caused by natural disasters, disasters caused by accidents, public health incidents and other emergencies;

(4) promotion of the development of areas such as education, science, culture, health, and sports;

(5) prevention and control of pollution and other public harms, and protection and improvement of the environment;

(6) Other public interest activities.

Article 4: The implementation of charitable activities shall follow the principles of lawfulness, voluntariness, integrity, and non-compensation; and must not violate social morals, and must not harm the societal public interest or the lawful rights and interests of others.

Article 5: The State encourages and supports natural persons, legal persons, and other organizations putting the socialist core values into practice, carrying forward the traditional virtues of the Chinese people and conducting charitable activities in accordance with law.

Article 6: The civil affairs department under the State Council oversees charity work nationwide; civil affairs departments of the people's governments at or above the county level or above oversee the charity work within their respective administrative jurisdictions.

Relevant departments of people's governments at the county level or above follow this law and other relevant laws to complete efforts on charities within the scope of their own responsibilities.

Article 7: September 5 of every year is"China Charity Day".

Chapter II: Charitable Organizations

Article 8: "Charitable organizations" as used in this Law refers to trusts, social groups (社会团体), social service organizations and other non-profit organizations established according to law, with the main directive of carrying out charitable activities.

Article 9: Charitable organizations shall comply with the following requirements:

(1) Have carrying out charitable activities as its main purpose;

(2) It does not have a profit-making motive;

(3) Have its own name and location;

(4) Have an organizational charter;

(5) Have necessary assets;

(6) Have institutional framework and responsible parties meeting requirements;

(7) other requirements provided for by laws and administrative regulations.

Article 10: Establishment of social organizations shall be by application for register to the civil affairs department at the county level or above, and the civil affairs department shall make a decision within 30 days of accepting the application. Where the requirements provided for in this law are met, registration is permitted and announced to society; where the requirements provided for in this law are not met, registration is not given and the reasons are explained in writing.

Already established social organizations may apply to the civil affairs department that they registered with to be confirmed as charitable organizations, and the civil affairs department shall make a decision within 20 days of accepting the application. Where the requirements for charitable organizations are met, confirmation is approved and announced to society; where the requirements for charitable organizations are not met, registration is not permitted and the reasons are explained in writing.

Where there are special circumstances requiring an extension of the period for making a decision to register or confirm, an extension may be given upon permission of the civil affairs departments under the State Council, but the extended period must not exceed 60 days.

Article 11: Charters of charitable organizations shall comply with laws and regulations and clearly contain the following matters:

(1) Name and domicile;

(2) Organizational model;

(3) the purpose of establishment and scope of operations;

(4) Asset sources and composition;

(5) the composition and duties of the decision-making and implementation bodies;

(6) internal oversight mechanisms;

(7) asset management and utilization systems;

(8) project management systems;

(9) conditions for termination and disposition of assets after termination;

(10) other important matters.

Article 12: Charitable organizations shall follow laws and administrative regulations and their charter to establish sound internal governance structures, and clarify responsibility and powers for areas such as major decisions, implementation and supervision.

Charitable organizations shall implement a unified national accounting system, shall undertake accounting according to law, shall establish a sound accounting supervision system, and shall accept the supervision and management of relevant government departments.

Article 13: Charitable organizations shall carry out charitable activities in accordance with charitable purpose set forth in the charter.

Article 14: The founders, major donors and managers of charitable organizations must not use their association to harm the interests of charitable organizations or the public interest.

Founders, major donors and managers who partake in transactions with the charitable organization must not participate in the charitable organizations' decision making process regarding the transactions, and conditions related to the transactions must be made public.

Article 15: Charitable organizations must not engage in or fund activities that endanger national security or social public interests, and must not accept contributions that have conditions attached which violate laws, regulations or social morals.

Article 16: Persons with any of the following circumstances must not serve as the responsible person for a charitable organizations.

(1) Persons lacking or having limited civil capacity;

(2) Those convicted of a crime, where 5 years has not yet elapsed since the conclusion of the criminal sentence;

(3) Those who have held a position of responsibility at an organization whose certificate of registration has been suspended or cancelled, and 5 years have not yet elapsed since the date upon which the organization's certificate of registration was suspended or cancelled;

(4) Other situations provided for by law or administrative regulations.

Article 17: Charitable organizations shall be terminated in any of the following circumstances:

(1) where termination is required due to division or merger;

(2) Where conditions for termination provided for in the charter manifest;

(3) Where they have not engaged in charitable activities for three consecutive years;

(4) Where they have been deregistered or the registration certificate revoked in accordance with law.

(5) other circumstances where laws or administrative regulations provide they shall be terminated.

Article 18: A liquidation shall be conducted of terminated charitable organizations.

The decision-making body of a charitable organization shall establish a liquidation team to conduct liquidation 30 days of conditions for termination manifesting, and announce this to the public. Where a liquidation team is not formed or it does not carry out its responsibilities, the civil affairs departments may ask the people's courts to appoint relevant personnel to form a liquidation team and to conduct liquidation.

After liquidation, the residual assets are handled in accordance with the charitable organizations' charters; where the charter does not have provisions, civil affairs departments preside over their transfer to charitable organizations with the same or similar purposes, which shall be announced to the public.

After charitable organizations complete liquidations, they shall handle withdrawal of registration and this will be announced to the public by the civil affairs departments.

Article 19: Charitable organizations may establish industry organizations according to law.

Charity industry organizations shall reflect the demands of the industry, push for industry-wide communication, strengthen industry self-regulation, improve the credibility of the industry, and promote the development of charities.

Chapter III: Charitable Fundraising

Article 20: "Charitable fundraising" as used in this law refers to charitable organizations' activities raising assets for their charitable purpose.

Charitable fundraising, includes public fundraising and non-public fundraising aimed at specific targets.

Article 21: Charitable organizations may begin conducting non-public fundraising of specified targets from the day on which they are registered.

Charitable organizations conducting non-public fundraising shall make the scope and donation period for specified targets clear, and explain matters such as the fundraising goals, and the usage of raised funding to the fundraising targets.

Article 22: Charitable organizations conducting public fundraising shall obtain public fundraising credentials. Charitable organizations that have been lawfully registered for two years may apply to the civil affairs department at which they registered for a public fundraising certificate. Where charitable organizations' internal governance structures are sound and operations are regular, the civil affairs departments shall give a public fundraising credentials certificate within 60 days from receiving an application.

Where charitable organizations are eligible for public fundraising since the day of registration as provided for by laws or administrative regulations, civil affairs departments shall issue public fundraising qualification certificates when registering them.

Article 23: Public fundraising may employ the following methods:

(1) Setting up donation boxes in public places;

(2) Holding benefit performances, contests, sales, exhibitions, auctions, or charity parties, and so forth;

(3) release fundraising information through radio, television, newspapers, the Internet and other media;

(4) Other public fundraising means.

Where charitable organizations carry out public fundraising by employing methods provided for in items 1 or 2 of the preceding paragraph, they shall do so within the administrative jurisdictional region of the civil affairs departments with whom they have registered, but there is no geographic limitation on donors' donations.

Charitable organizations conducting fundraising through the Internet shall publish fundraising information on the charitable information platforms unified or designated by civil affairs departments; of which charitable organizations registered with civil affairs departments at or above the provincial level can also publish fundraising information on their own websites.

Article 24: Initiation of public fundraising shall formulate fundraising plans. Fundraising plans shall include information such as the purpose of fundraising, the starting and ending time, geographical regions, the names and business addresses of the responsible personnel, the methods of accepting donations, bank accounts, beneficiaries, the purposes of the funds and materials raised, the cost of fundraising, and the the disposition of residual assets.

Article 25: In conducting public fundraising, information such as the name of the fundraising organization, the public fundraising credentials certificate, the fundraising plan, contact information, and methods of inquiring about fundraising information, shall be prominently displayed at the sites of fundraising activities or on fundraising media.

Article 26: On account of a charitable purposes, organizations or persons not possessing public fundraising credentials may cooperate with charitable organizations that possess credentials for public fundraising to conduct public fundraising. The funds and materials raised are to be managed by the charitable organizations eligible for public fundraising.

Article 27: Radio, television, press and also network service providers and telecom operators shall verify the the registration certificates and the public fundraising qualification certificates of the charitable organizations that utilize their platforms to conduct public fundraising.

Article 28: When major natural disasters, accidental disasters and public health incidents or other emergencies occur, relevant people's governments shall establish coordination mechanisms to provide demand information and to orderly guide fundraising and rescue operations.

Article 29: When conducting fundraising activities, forcible apportionment or covert forced apportionment [trans. note '摊派' occurs where members of an organization are each compelled to pay a set portion of a donation] is not permitted, and obstructing/hindering public order, industrial production and people's lives is not permitted.

Article 30: It is prohibited for any organization or individual to falsely use a charity's name, or pose as a charitable organization, to carry out charitable activities, or obtain assets by fraud.

Chapter IV: Charitable Donations

Article 31: "Charitable donations" as used in this law refers to voluntary and uncompensated activities conducted by natural persons, legal persons and other organizations in donating assets for charitable purposes.

Article 32: Donors can donate through charitable organizations and can also donate directly to beneficiaries.

Article 33: Assets donated by donors shall be lawful assets that they have the right to dispose of. Charitable donations of assets includes currency, physical property, securities, equity, intellectual property rights and other tangible or intangible property.

The material objects donated by donors shall have usable value, and shall comply with standards such as for safety, health and environmental protection.

Where the donor donates a product of its own enterprise, it shall provide a certificate of product approval or product quality inspection certificate.

Article 34: Where natural persons, legal persons and other organizations, in the course of conducting a business activity such as show, a competition, a sale or an auction, undertake to use part or all of the proceeds for a charitable purpose, they shall sign a donor agreement with the charitable organization or other recipient of the gift prior to the commencement of the activity, and shall perform the donation obligation pursuant to that donor agreement, and shall disclose the donation situation publicly.

Article 35: Charitable organizations accepting donations shall issue donation receipts to the donors, uniformly printed by or under the supervision of finance departments. Donation receipts shall state clearly the donor, the types and amount of assets donated, the name of the charitable organization, the name of the responsible person, the date of the receipt, and other information. Where donors are anonymous or decline to accept the donations receipts, charitable organization shall keep relevant records.

Article 36: Where a charitable organization receives a donation and the donor requests a written donor agreement, the charitable organization shall enter into a written agreement with the donor.

Written donor agreements include: the names of the donor and the charitable organization, the type of asset being donated, the volume, the quality, its application, and the time of delivery, etc.

Article 37: When the donor and recipient agree on the uses and beneficiaries of assets, they must not designate other interested parties as beneficiaries.

Organizations and individuals must not use charitable donations to use any means to publicize tobacco products or the manufacturers or vendors thereof, as well as other matters prohibited from being publicized by laws and regulations.

Article 38: Donors shall follow the donation agreement in performing their donation obligations. Where, in breach of the donation agreement, donors fail to deliver donated assets exceeding the time limit, and where one of the following circumstances exists, charitable organizations or other persons accepting the donations can request delivery; where the donors refuse to deliver, charitable organizations and other persons accepting donations can apply to the people's courts for an order for payment or raise a lawsuit:

(1) Where donors have publicly promised to donate through radio, television, press, the Internet, or other such means.

(2) Where donated assets are used in the charitable activities provided for by Items 1 -3 of Article 3 of this Law, and a written donor agreement is signed;

Article 39:A donor has the right to inquire about or make copies of relevant data on the management and the use of his donated assets; and charitable organizations shall proactively give feedback to the donor on relevant situations.

Where charitable organizations abuse the donated assets in violation of the purposes agreed upon in donor agreements or by other means, the donors have the right to demand rectification; where rectification is refused, the donors can sue in the people's courts.

Chapter V: Charitable Trusts

Article 40: "Charitable trusts" and "public interest trusts" as used in this Law refer to trustors lawfully entrusting their assets to a trustee for charitable purposes, and the trustee, in accordance with the wishes of the trustors and in the name of the trust, managing and disposing of assets in order to carry out charitable activities.

Article 41: The establishment of a charitable trust and the designation of the trustees and supervisors, shall be done in writing. Trustees shall file trust documents for recording with the civil affairs departments of the people's governments at or above the county level of the places where the trustors reside within seven days of the signing of trust documents.

Article 42: Trustors identify charitable organizations in which they have faith to serve as trustees of charitable trusts.

Article 43: Where the trustees of a charitable trust violate the obligations of the trust or have difficulty performing their duties, the trustor may change the trustee. Within 7 days of the change, the trustees after the change shall report the situation to the civil affairs department for the original recording to make a new record.

Article 44:Trustees of charitable trusts may identify trust supervisors as needed.

The trust supervisor oversees the actions of the trustee, safeguarding the rights and interests of the trustors and the beneficiaries in accordance with law. Where trust supervisors discover that trustees have violated their obligations under the trust or are having difficulty performing their duties, they shall submit it to the trustor and also have the right to bring a lawsuit in their own name.

Article 45:Trustees of charitable trusts, in managing or handling the assets of the trust, shall perform their duties in accordance with the charity's purposes, with dedication to duty and integrity in performance and prudent management.

The trustee shall promptly report on the status of the handling of the affairs of the trust, and the status of the management and use of trust assets according to the requirements of the trust deed and the trustor. Trustees of charitable trusts shall report at least once a year to the civil affairs departments where they are on record regarding the status of the handling of the affairs of the trust and state of financial affairs, and this shall be made public.

Article 46:Where matters such as the establishment of charitable trusts, the management of trust assets, trust parties, the termination and liquidation of trusts are not covered by this Chapter, the relevant provisions of other Chapters of this Law shall govern; where [these matters] are not covered by this Law, the relevant provisions of the Trust Law of the People's Republic of China shall govern.

Chapter VI: Charitable Assets

Article 47:The assets of charitable organizations include:

(1) Start-up assets;

(2) Donations;

(3) Other lawful assets.

Article 48:The assets of charitable organizations shall only be used entirely for charitable purposes in accordance with their charter and the donation agreement, and must not be distributed among the founders, donors or members of the charitable organizations.

Charitable assets must not be privately divided, embezzled or misappropriated by any organization or individual.

Article 49: Charitable organizations shall create records for registration and conduct strict management of raised assets, and shall earmark funds for specified purposes,.

Where physical property donated by a donor is not easily stored or transported, or difficult to directly use for a charitable purpose, charitable organizations may lawfully auction it or sell it off, and the proceeds, following withholding of the necessary taxes, shall go entirely to the agreed upon charitable purposes.

Article 50:Charitable organizations shall follow the principles of lawfulnessf, safety and effectiveness in order acting to preserve property values and appreciate current investments, and the gains obtained through investment shall be used entirely for charitable purposes. Major investment plans shall be agreed to by two-thirds or more of the members of the decision-making body, but assets given under government funding or a donation agreement that stipulates it must not be in must not be used for investment, must not be used for investment.

Article 51:Charitable activities carried out by charitable organizations shall be in accordance with the provisions of laws, regulations and the charter, and shall follow the fundraising plan or donation agreement in utilizing donated assets; where it is truly necessary to change the usage of donated assets, the donors' consent shall be obtained.

Article 52:Charitable organizations shall reasonably design charitable projects, optimize their course of implementation, minimize operational costs, and raise the efficiency of using charitable assets.

Charitable organizations shall establish project management systems, and conduct follow up supervision of projects' implementation.

Article 53:Where after charitable projects conclude, there are remaining donated assets, it is handled in accordance with the fundraising plan or donation agreement; where there is no stipulation in the fundraising plan or donation agreement, the charitable organization shall use the remaining assets in a charitable project with the same or similar goals, and make this public.

Article 54:Charitable organizations determination of beneficiaries shall adhere to the principles of openness, fairness and justness; and must not designate persons in whom the charitable organizations' managers have an interest as beneficiaries.

Article 55:Charitable organizations may sign agreements with beneficiaries as needed, clarifying the rights and obligations of both sides, and stipulating on the use, amount, and methods of use of funding, and other such content.

Where beneficiaries do not follow the agreement in using funding assets, or otherwise seriously violate the agreement, the charitable organization has the right to request they make corrections; where they refuse to make corrections, the charitable organization has the right to end the agreement.

Article 56:The standards for the annual expenditures that charitable organizations spend on charitable activities and for management costs are to be formulated by the civil affairs departments of the State Council, in consultation with the finance, taxation and other departments of the State Council. Where donation agreements stipulate the charitable activity expenditure and the management costs of individual donated assets, follow these stipulations.

Chapter VII: Charitable Services

Article 57:"Charitable services" as used in this Law refer to volunteer services and other non-profit services provided to others or to the society by charitable organizations and other organizations as well as individuals based on charitable purposes.

Charitable services carried out by charitable organizations may be provided themselves, or may also be entrusted to another organization with service expertise, or may recruit volunteers to provide them.

Article 58:The implementation of charitable services shall respect the individual dignity of beneficiaries and of the volunteers and must not encroach on beneficiaries' and the volunteers' privacy.

Article 59:The implementation of charitable services that have specialized skills, such as medical rehabilitation, care-giving and nursing, education and training, or social work; shall carry out the standards and regulations formulated by the state or industry associations.

Where charitable organizations recruit to conduct charitable services that have specialized skills, they shall conduct relevant training on the volunteers based on need.

Article 60:Charitable organizations' recruiting volunteers to participate in charitable services shall publicly announce all information related to the charitable service, and give notice of risks that might occur in the course of service.

Charitable organizations may sign agreements with volunteers as needed, clarifying the rights and obligations of both parties, stipulating information such as the content, method, and time of service.

Article 61:Charitable organizations shall make real name registration of volunteers, and record the time, content, and appraisal of volunteers' service. As requested by volunteers, charitable organizations shall issue free and accurate proofs of volunteer service records.

Article 62:Charitable organizations shall arrange for volunteers to engage in charitable service appropriate to their age, education level, skills and physical condition.

Article 63:Volunteers accepting charitable organizations' arrangements to participate in charitable services shall abide by management and accept necessary training.

Article 64:Charitable organizations shall provide volunteers with necessary capacity to carry out the charitable services, and safeguard volunteers' lawful rights and interests.

Before charitable organizations arrange for volunteers to participate in charitable service where personal injury might occur, they shall purchase accidental personal injury insurance for the volunteers.

Chapter VIII: Information Disclosure

Article 65: Charitable organizations shall lawfully carry out obligations to disclose information. Disclosure of charitable information shall be truthful, complete and timely.

Article 66:People's governments at the county level or above establish and improve systems for gathering and releasing charity information.

The civil affairs departments of the people's governments at the county level or above shallpromptly release charity information to the public, and provide charity information release services for free on a uniform or designated information platform.

Charitable organizations shall release charity information on the platforms stipulated by the preceding paragraph, and shall be responsible for the authenticity of the information.

Article 67:The civil affairs departments and other relevant departments of the people's governments at or above the county level shall timely disclose to the public the following information:

(1) the registration of charitable organizations;

(2) charitable trusts filing matters;

(3) the list of charitable organizations with public fundraising credentials;

(4) the list of charitable organizations qualified to tax deductions for public interest donations;

(5) Measures for promoting charitable activities such as preferential tax treatment and funding subsidies;

(6) Information on purchasing of services from charitable organizations;

(7) Outcomes of investigations into charitable organizations and charitable trusts;

(8) The outcome of commendations and punishments of charitable organizations, other organizations and individuals;

(9) Other information that laws and regulations provide shall be disclosed.

Article 68:Charitable organizations shall annually disclose to the public the following information:

(1) The organization charter, and registration information such as the unified social credit code and the number of the registration certificate;

(2) Information on the members of their decision-making, implementation, and supervision bodies;

(3) Annual work report, including financial accounting report, annual situations of conducting fundraisings, accepting donations, and the situations of carrying out charity programs.

(4) Other information required to be disclosed by the civil affairs department of the State Council.

Where they are major changes to the information abovementioned, charitable organization shall timely disclose them to the public.

Article 69:Charitable organizations shall periodically disclose the circumstances of fundraising from the public and of charitable projects' implementation.

Where the period for public fundraising exceeds 6 months, the specific circumstances of public fundraising should be reported at least once every 3 months, and after the fundraising has concluded, the overall circumstances of fundraising shall be disclosed within 3 months.

Where charitable projects' implementation period exceeds 6 months, the situations of the implementation of the projects should be reported at least once every 3 months, and after the projects have concluded, the overall circumstances of implementation and use of collected funds and property shall be disclosed within 3 months.

Article 70:Where charitable organizations fundraise from specified targets, they shall promptly inform donors of the fundraising circumstances, and the circumstances of the management and use of donated funds and property.

Article 71:Charitable organizations shall inform beneficiaries of information such their funding standards, work process and work regulations.

Article 72:Information involving state secrets, trade secrets, or personal privacy, in addition to any other information that by law or administrative policy may not be made public, shall not be made public.

Where donors, the trustors or the beneficiaries of charitable trusts do not consent to the disclosure of their names, titles, addresses or other information, they must not be disclosed.

Chapter IX: Promotional Measures

Article 73:People's governments at the county level or above shall, in accordance with the social and economic development situation, formulate policies and measures to promote of the development of the charity field.

People's government at or above the county level and the relevant departments thereof shall, within their own duties, provide charity demand information to charitable organizations and others, and provide guidance and help to charitable activities.

Article 74:The civil affairs departments of the people's governments at or above the county level shall establish mechanisms of sharing charity information with other departments.

Article 75:Charitable organizations and the income thereof enjoy tax benefits according to law.

Article 76:Where natural persons, legal persons and other organizations donate assets for use in charitable activities, they receive tax benefits in accordance with law. The amount of charitable donations beyond the amount deductible from income tax is allowed to be carried over into the calculation of taxable income over the next three years.

Overseas donations to be used for charitable activities are lawfully entitled to a reduction or exemption from import duties and also from import VAT.

Article 77:Where beneficiaries accept charitable donations, they are lawfully entitled to tax benefits.

Article 78:Where charitable organizations, donors, or beneficiaries enjoy tax benefits in accordance with law, relevant departments shall promptly handle the relevant procedures.

Article 79:Where donors donate physical objects, securities, equity, and intellectual property right to charitable organizations, administrative fees related to transferring rights are waived in accordance with law.

Article 80:The State implements special preferential policies for the carrying out of charitable activities on poverty relief and aid.

Article 81:Where charitable organizations carrying out the charitable activities stipulated by Items 1 and 2 of Article 3 of this Law require land for charitable service facilities, they may use state-owned allocated land or rural collective construction land in accordance with law. The use of land for charitable services must not be altered except through legally prescribed procedures.

Article 82:The government provides financial policy support for charitable endeavors, encouraging financial establishments to provide financial services such as financing and bill keeping to charitable organizations and charitable trusts.

Article 83:All levels of people's government and their relevant departments may lawfully use methods such as governmental purchase of services to support charitable organizations in providing service to the public, and follow the relevant laws and regulations on government procurement to report relevant circumstances to the public.

Article 84:The State employs measures to promote a culture of charity and to foster citizens' awareness of charity.

Schools and other educational institutions shall include charitable culture in educational and teaching content, and the State encourages institutions of higher education to cultivate talents specialized in charity and supports institutions of higher education and research institutions to carry out theoretical research on charities.

Media such as radio, television, press, and websites shall actively conduct charity publicization activities, popularize charity knowledge, and spread a culture of charity.

Article 85:The State encourages enterprises, public institutions, and other organizations to provide venues and other facilitation of charitable activities.

Article 86:With the consent of the beneficiaries, donors may put a commemorative name on charitable projects to which they have donated, but where provisions of law or regulations require approvals, follow those provisions.

Article 87:The State establishes a commendation system for charities, where the people's governments at the county level or above or relevant departments give commendations to natural persons, legal persons and other organizations that make outstanding contributions in charitable endeavors.

Chapter X: Oversight and Management

Article 88:The civil affairs departments of people's governments at the county level or above shall perform their duties according to law, conduct oversight and inspections of charitable activities, and give guidance to charity industry organizations.

Article 89:The civil affairs departments of the people's governments at the county level or above have the authority to take the following measures against charitable organizations suspected of violating the law:

(1) Conduct on-site inspections of charitable organizations' locations or the sites where charitable activities occurred;

(2) Demand that charitable organizations make explanations, and access or reproduce relevant data;

(3) Conduct investigations with relevant work units and individuals related to charitable activities regarding situations related to supervision and management;

(4) Inquire into charitable organizations' financial accounts, with the approval of the principal responsible persons of the civil affairs departments of the people's governments at the county level or above;

(5) Other measures provided for by laws and administrative regulations.

Article 90:Where civil affairs department conduct inspections or investigations of charitable organizations or relevant units or individuals, there shall be no fewer than two inspectors or investigators, and they shall present lawful documents and inspection or investigation notices.

Article 91:Each year, a charitable organization shall submit its annual work report to the civil affairs department with which it was registered, including financial accounting reporting, the yearly situation of conducting fundraising and accepting donations, the situations of managing and using charitable assets, and the situations of carrying out charity programs.

Article 92:The civil affairs departments of people's governments at the county level and above shall establish credit record systems for charitable organizations and their responsible persons, and shall make these public.

Civil affairs departments shall establish evaluation systems for charitable organizations. Third-party institutions are encouraged and supported to conduct evaluations of charitable organizations and to release the evaluation results to the public.

Article 93:Charity industry organizations shall establish and perfect industry standards and strengthen industry self-regulation.

Article 94:Any unit or individual who discovers that a charitable organization or a charitable trust has violated the law may make a complaint or report it to the civil affairs departments or other relevant departments or charitable industry organizations. Civil affairs departments or other relevant departments or charitable industry organizations shall, upon receipt of a complaint or report, promptly investigate and handle it.

The State encourages the public and the media to exercise supervision over charitable activities, and to expose any obtaining of assets by deception in the name of a charity or by posing as a charitable organization; or any violations of the laws and regulations by charitable organizations and trusts; giving full play to public opinion and social supervision.

Chapter XI: Legal Responsibility

Article 95:Where charitable organizations have any of the following situations, the civil affairs departments give a warning and order corrections be made within a stated time; where corrections are not made within the stated time, temporarily suspend activities for a fixed time; and where circumstances are serious, revoke registration certificates:

(1) Not carrying out charitable activities in accordance with charitable purposes;

(2) Not fulfilling information disclosure obligations in accordance with law;

(3) Not filing annual work reports in accordance with law;

(4) Leaking donors', volunteers', or beneficiaries' private information.

Article 96:Where charitable organizations have any of the following situations, the civil affairs departments give a warning and order corrections within a stated time; where no correction is made within the stated time, temporarily suspend activities; and where circumstances are serious, revoke registration documents; where there are unlawful gains, the civil affairs departments collect them and transfer them to charitable organizations with the same or similar purpose; fine the persons who are directly in charge and other directly responsible personnel between 10,000 and 100,000 yuan; and where a crime is constituted, pursue criminal responsibility in accordance with law:

(1) Secretly dividing, embezzling or misappropriating charity assets;

(2) The standards for annual expenses of carrying out charitable activities and for management costs do not comply with regulations;

(3) Violating Article 14 of this law, causing losses of charitable assets;

(4) Changing the use of donated assets of one's own accord;

(5) Using assets that must not be used for investment for investments;

(6) Accepting donations with attached conditions that violate laws and regulations or social moralities.

Article 97:Where the initiation of fundraising activities has any of the following circumstances, the civil affairs departments gives a warning and orders suspension of fundraising activities; unlawfully solicited assets are ordered returned to the donor; where there is difficulty in returning them, the civil affairs departments collect them and transfer them to other charitable organizations for charitable purposes; may find relevant organizations or individuals between 10,000 and 100,000 yuan:

(1) An organization or individual not eligible to openly fund-raise openly fund-raises;

(2) Radio, television, newspaper and network service providers or telecom operators did not perform their verification duties in accordance with Article 27 of this law;

(3) Putting quotas or indirect quotas on units or individuals;

(4) Obstructing the public order, business and production, or the people's lives.

Where radio, television, newspaper and network service providers or telecom operators did not perform their verification duties in accordance with Article 27 of this law, they are punished by their respective competent departments according to law.

Where actions stipulated by the previous two paragraphs constitute actions violating public security administration, the public security organs give public security administrative punishments in accordance with law.

Article 98:Where charitable organizations fail to issue donors with a public welfare donation receipt in accordance with law, fail to issue a record showing volunteer service in accordance with law or do not respond to donors' inquiries regarding the use of their donated assets, the civil affairs departments give a warning and order corrections within a stated time; where no correction is made within the stated time, temporarily suspend activities.

Article 99:Where charitable organizations obtain preferential tax treatment through fraud, the taxation departments investigate in accordance with law, and where the circumstances are serious, the civil affairs departments revoke registration certificates; where a crime is constituted, pursue criminal responsibility in accordance with law.

Article 100:Where charitable organizations engage in or fund activities that endanger national security or the public interest, the relevant organs investigate in accordance with law, and where the circumstances are serious, the civil affairs departments revoke registration certificates; where a crime is constituted, pursue criminal responsibility in accordance with law.

Article 101:Where charitable organizations acting as the trustors of charitable trusts have any of the following situations, the civil affairs departments give a warning and order corrections within a stated time; where there are unlawful gains, the civil affairs departments collect them and transfer them to charitable organizations or another charitable trust with the same or similar purpose; fine the persons who are directly in charge and other directly responsible personnel between 10,000 and 50,000 yuan:

(1) Using the trust assets and proceeds for non-charitable purposes;

(2) Failing to report on the handling of trust operations and financial positions to the civil affairs departments or to make disclosures to the public.

Article 102:Where in the course of charitable service beneficiaries or third parties suffer harms caused by the negligence of charitable organizations or volunteers, the charitable organizations bear responsibility for compensation in accordance with law; and where the harm is intentionally caused by a volunteer or their gross negligence, the charitable organizations may seek compensation from them.

Where in the course of participating in charitable service volunteers suffer harms caused by the negligence of charitable organizations, the charitable organizations bear responsibility for compensation in accordance with law; and where the harm is caused by force majeure, the charitable organizations shall give appropriate subsidies.

Article 103: Where natural persons, legal persons or other organizations defraud assets falsely in the name of charity or pretending to be charitable organizations, the public security organs investigate in accordance with law, and where a crime is constituted pursue criminal responsibility in accordance with law.

Article 104: Where civil administration departments and other relevant departments of people's governments at the county level or above, or their staffs, have any of the following situations, the relevant departments at the level above or the supervisory organ order corrections; where a punishment should be given, the organ for hiring and terminations, or the supervisory organ, gives sanctions in accordance with law to the persons who are directly in charge and other directly responsible personnel; where a crime is constituted, pursue criminal responsibility in accordance with law:

(1) failure to perform information disclosure obligations in accordance with law;

(2) Giving quotas or indirect quotas for fundraising tasks, forcibly appointing volunteers or charitable organizations to provide sources;

(3) failure to perform oversight and management duties in accordance with law;

(4) Unlawfully implementing administrative compulsory measures or administrative punishments;

(5) privately dividing, embezzling or misappropriating, charitable assets;

(6) Other conduct abusing professional powers, dereliction of duties, or improper conduct for personal gain.

Chapter XII: Supplementary Provisions

Article 105: Urban and rural community organizations and units can conduct mass mutual assistance and aid activities within their own organizations and units.

Article 106: Organizations other than charitable organizations may carry out charitable activities within their own power.

Article 107:This law shall take effect on XXXXX.

 

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