Laws of the People's Republic of China

the Standing Committee of the National People's Congress

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

No.49

The Negotiable Instruments Law of the People's Republic of China which has been adopted at the 13rd meeting of the Standing Committee of the Eighth National People's Congress on May 10, 1995 is promulgated now, and shall enter into force as of January 1, 1996.

President of the People's Republic of China: Jiang Zemin

May 10, 1995

Negotiable Instruments Law of the People's Republic of China ContentsChapter I General Provisions

Chapter II Bills of Exchange

Section 1 Issue

Section 2 Endorsement

Section 3 Acceptance

Section 4 Guaranty

Section 5 Payment

Section 6 Right of Recourse

Chapter III Promissory Notes

Chapter IV Cheques

Chapter V The Applicable Laws Pertaining Negotiable Instruments in Cases Involving Foreign Elements

Chapter VI Legal Responsibility

Chapter VII Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is formulated for the purpose of standardizing actions concerning negotiable instruments, protecting the legal rights of parties using negotiable instruments, maintaining economic order in society and promoting the development of the socialist market economy.

Article 2

This Law applies to all transactions concerning negotiable instruments within the territory of the People's Republic of China.

The term "negotiable instrument" as used in this Law denotes "bill of exchange", "promissory note" and "cheque".

Article 3

Activities concerning instruments shall abide by the laws and administrative regulations and shall not harm public interests.

Article 4

When creating an instrument, the issuing party shall endorse it according to statutory conditions and bear liability for the instrument according to the items specified therein.

When exercising his rights with regard to an instrument, the bearer shall endorse the instrument and present it according to statutory procedures.

Other debtors endorsing the instrument shall bear liability for the instrument according to the items specified therein.

The instrument right as referred to in this Law denotes the right of the bearer to claim the specified amount in payment from the debtor including the right to claim for payment and the right of recourse.

Liability for negotiable instruments as referred to in this Law denotes the obligation of the debtor to pay the sum specified in the instrument to the bearer.

Article 5

A party to an instrument may authorize an agent to endorse the instrument but must specify the principal-agent relationship on the instrument.

A person without power of agency who endorses an instrument in the capacity of agent shall bear liability for the instrument; an agent who goes beyond the limits of his power of agency shall undertake liability for the part of the instrument overstepping the limits of his powers.

Article 6

The endorsement of an instrument by a person with no capacity for civil conduct or with limited capacity for civil conduct is invalid, but this does not influence the validity of other endorsements of the instrument.

Article 7

The endorsement of an instrument shall be by signature, seal or both signature and seal.

The endorsement of an instrument by a legal person or other organization which makes use of instruments shall be the official seal of the legal person or organization accompanied by the endorsement of its legal representative or its authorized agent.

The signature on an instrument must be the name of the party concerned.

Article 8

The sum of money on an instrument shall be specified in both Chinese characters and Arabic numerals; the two figures must be the same, if the two figures are not the same, the instrument shall be null and void.

Article 9

Items specified in an instrument must conform to the provisions of this Law.

The sum, date and payee recorded in an instrument must not be altered. Instruments which have been altered are invalid.

Other items in an instrument may be altered by the person who originally wrote them, as proof alterations must be endorsed by the aforementioned.

Article 10

The issue, acquisition and transfer of an instrument shall be made in good faith and shall constitute a real transaction and reflect the credit-debit relationship.

An instrument can only be acquired in consideration of payment, the corresponding value of which must be agreed by the two parties to the instrument.

Article 11

Acquisition of an instrument through taxation, inheritance or legacy which may be realized in accordance with law without payment, shall not be subject to being in consideration of payment. However, the bearers' rights on the instrument shall not exceed those of prior parties.

Prior parties refers to other debtors of an instrument who endorsed it prior to its endorsement by a specific signatory or bearer.

Article 12

In cases where an instrument was acquired through fraudulence, theft or coercion, or in cases where the bearer acquired an instrument through malice while he knew well that the aforementioned circumstances existed, the bearer shall not enjoy the instrument right.

In cases where the bearer through gross negligence acquires an instrument which does not comply with the provisions of this Law, then the bearer shall not enjoy the instrument right.

Article 13

A debtor of an instrument shall not oppose the bearer on the basis of a dispute between the issuer and the debtor himself or between the any prior parties to the bearer and the debtor himself. However the exception is in cases where the bearer acquired the instrument with the foreknowledge that such opposition existed.

A debtor of an instrument may oppose a bearer who had a direct credit-debit relationship with him and did not perform the stipulated obligation.

Opposition as referred to in this Law denotes the act whereby the debtor of an instrument refuses to carry out his obligations to the creditor in accordance with the provisions of this Law.

Article 14

Items specified in an instrument must be genuine and cannot be forged or altered. Those who forge or alter the endorsement or other items in an instrument shall bear legal responsibility.

Endorsements on an instrument which have been forged or altered shall have no impact on the other genuine endorsements thereon.

Where other items in the instrument have been altered, persons who endorsed the instrument before it was altered shall be liable for the items originally specified in the instrument, persons who signed after it was altered shall be liable for the items specified after the instrument was altered. In cases where it cannot be determined whether the instrument was endorsed before or after it was altered, it shall be treated as an instrument which was endorsed before being altered.

Article 15

Where an instrument has been lost, the person who has lost the instrument may promptly notify the payer of the instrument to suspend payment, except in cases where the payer is not specified in the instrument or when the payer or his agent cannot be identified.

The payer shall temporarily cancel payment when he receives notification of the loss of the instrument.

The person losing the instrument shall in accordance with the law apply to the people's court for the publication of a public notice asserting his claim or he can bring an action in the people's court within three days of notifying the payee to suspend payment or after the loss of the instrument.

Article 16

The procedure by which the bearer of the instrument exercises his rights or preserves his rights against the debtor shall be carried out in the business premises of the party concerned during business hours or at their place of residence if no business premises exist.

Article 17

Rights to an instrument shall cease to be valid if not exercised within the following time limits:

1.

The rights of the bearer of the instrument over the issuer and the acceptor of the instrument cease to be valid two years after the date of maturity of the instrument. Bills or notes payable on sight become invalid two years after the date of issue;

2.

The rights of the bearer of a cheque over the issuer cease to be valid six months after the date of issue;

3.

The bearer's right of recourse over prior parties ceases to be valid six months after the date of non-acceptance or non-payment;

4.

The bearer's right of re-recourse over prior parties ceases to be valid three months after the date of settlement or the commencement of a lawsuit.

The date of issue and the date of maturity of an instrument shall be set in accordance with the law by the parties to the instrument.

Article 18

A bearer who has lost his rights on instrument because of the expiration of his rights or because the items recorded in the instrument are not comprehensive may still enjoy civil rights, and may request that the payer or the acceptor refunds the amount equivalent to that part of the instrument not yet paid.

Chapter II Bills of Exchange

Section 1 Issue

Article 19

A bill of exchange is an instrument signed by the issuer, authorizing the payer to unconditionally pay a certain sum of money to the payee or the bearer when the bill is presented or at a specified time.

Bills can be classified into bankers' bills and commercial bills.

Article 20

Issue refers to the act of the issuer signing and issuing the instrument and delivering it to the payee.

Article 21

The issuer of the bill must have an authentic relationship with the payer authorizing payment and must possess reliable funds with which to pay the sum in the bill.

Bills without consideration shall not be signed or issued to defraud money from banks or other parties of an instrument.

Article 22

A bill must specify the following items:

1.

The word "bill";

2.

Authorization of unconditional payment;

3.

A fixed sum;

4.

The name of the payer;

5.

The name of the payee;

6.

The date of issue;

7.

The endorsement of the issuer.

A bill shall be null and void if any of the above-mentioned items are not specified therein.

Article 23

The date of payment, place of payment and place of issue, if specified on the bill, shall be legible and unambiguous.

A bill is payable on sight if the date of payment is not specified.

The place of payment, if not specified on a bill, shall be the business premises, domicile or habitual residence of the payer.

The place of issue, if not specified on a bill, shall be the business premises, domicile or habitual residence of the issuer.

Article 24

Items relating to the issue of a bill other than those stipulated by this Law may be specified on a bill, but such items shall have no effect on the validity of the bill.

Article 25

The date of payment may be specified in either one of the following forms:

1.

Payable on sight;

2.

Payable on a fixed date;

3.

Payable during a fixed period after the date of issue;

4.

Payable during a fixed period after the date of receipt.

The date of payment as specified in the preceding paragraph shall be the date of maturity of the bill.

Article 26

The issuer who signs and issues the bill shall bear liability for its acceptance and payment.

In the event of non-acceptance or non-payment of the bill, the bearer shall be reimbursed the sum and expenses as stipulated in Articles 70 and 71 of this Law.

Section 2 Endorsement

Article 27

The bearer may transfer his rights to the bill to other persons or authorize other persons to exercise some of his rights to the bill.

When the issuer writes the term "non-transferable" on the bill, then it cannot be transferred.

The bearer must endorse and hand over the bill when exercising his rights as stipulated in the first paragraph of this article.

Endorsement refers to the act of putting relevant items in writing and endorsing the back of the bill or an allonge.

Article 28

The person endorsing the bill may use an allonge and attach it to the bill if there is not enough space in the bill for the items.

The first person to write on the allonge shall endorse the conjuncture of the bill and the allonge.

Article 29

An endorsement shall be signed by the person making it and the date of endorsement shall be specified.

An undated endorsement shall be deemed to have been added to the bill before its date of maturity.

Article 30

The name of the person endorsing the bill must be specified when the bill is endorsed so that the rights to the bill are transferred or to authorize another person to exercise some of the rights to the bill.

Article 31

There shall be an uninterrupted series of endorsement in a bill which is transferred by means of endorsement. The bearer must prove his rights to the bill by an uninterrupted series of endorsement; a person to whom a bill is transferred by means other than endorsement or who acquires a bill by other legal means shall provide evidence in accordance with the law showing his rights to the bill.

"An uninterrupted series of endorsement" as referred to in the preceding paragraph denotes that, in the course of the transfer of an instrument, the endorsement of the person endorsing the transfer of the bill shall be made by the immediate prior endorsee to acquire the bill.

Article 32

When the bill is transferred by means of endorsement, the subsequent party shall be liable for the authenticity of the endorsement made by the immediate prior party.

"The subsequent party" denotes other debtors of an instrument who endorse it after its endorsement by a specific party.

Article 33

No conditions can be attached to endorsements. Any conditions attached to endorsements shall have no effect on the bill.

Any endorsements purporting to transfer a part of the amount payable, or to transfer the bill to two or more people separately, shall be null and void.

Article 34

When the endorser writes the term "non-transferable" on the bill and his subsequent party reendorses and transfers it, the original endorser shall not bear any responsibility for any guarantees made to the subsequent party's endorsee.

Article 35

Where an endorsement contains the word "by procuration", the endorsee shall be entitled to exercise mandated rights to the bill on the endorser's behalf. However, the endorsee shall not transfer the rights to the bill by means of re-endorsement.

A bill may be pledged; when the bill is pledged, the endorsement shall contain the term "value in pledge". The endorsee may exercise the rights to the bill when realizing the right of pledge according to law.

Article 36

A bill cannot be transferred by means of endorsement when acceptance or payment has been refused or when the time limit for presentation in order to receive payment has expired, if the bill has been endorsed and transferred, the endorser shall bear liability for the bill.

Article 37

After the bill has been endorsed and transferred, the endorser shall be liable for guaranteeing the acceptance and payment of the bill held by the subsequent party. In cases of non-acceptance or non-payment of the bill, the endorser shall compensate the bearer with the sum and expenses as stipulated in Articles 70 and 71 of this Law.

Section 3 Acceptance

Article 38

Acceptance denotes the act whereby payer of the bill promises to pay the sum of money in the bill at its maturity.

Article 39

Where a bill is payable on a fixed date or within a fixed period after the date of issue, the bearer shall present the bill to the payer for acceptance before the bill's date of maturity.

Presenting the bill for acceptance denotes the act whereby the bearer presents the bill to the payer and demands a promise of payment from the payer.

Article 40

Where a bill is payable during a fixed period after presentation, the bearer shall present the bill to the payer for acceptance within one month of the date of issue.

Where a bill has not been presented for acceptance within the prescribed period, the bearer shall lose the right of recourse against prior parties.

Where a bill is payable on sight, it does not need to be presented for acceptance.

Article 41

The payer shall accept or refuse the bill within three days of receiving the bill as presented for acceptance.

On receiving of a bill presented for acceptance by the bearer, the payer shall make out a receipt to the bearer. The receipt shall be signed and the date on which the bill was presented shall be written thereon.

Article 42

When accepting a bill, the payer shall write the word "accepted" and the date of acceptance on the front of the bill and sign it; after seeing a bill which is payable during a fixed period, the date of payment shall be specified at the time of acceptance.

Where the date of acceptance is not specified on the bill, it shall be the last day of the period prescribed by the first paragraph of the preceding article.

Article 43

When accepting a bill, the payer shall accept it unconditionally; if conditions have been added, this is deemed to be a refusal.

Article 44

When the payer has accepted the bill, he shall bear the liability of paying it at maturity.

Section 4 Guaranty

Article 45

The responsibility of guaranteeing the payment of a bill shall be borne by the guarantor.

The guarantor shall be someone other than the debtor of the bill.

Article 46

The guarantor must specify the following items on the bill itself or on an allonge:

1.

The word "guaranteed";

2.

The name and address of the guarantor;

3.

The name of the person to whom the guaranty is given;

4.

The date of guaranty;

5.

The endorsement of the guarantor.

Article 47

When the guarantor has not specified Item 3 of the preceding article on the bill itself or on an allonge, in cases where the bill has already been accepted, the person who accepted the bill is he to whom the guaranty is given; in cases where the bill has not yet been accepted, the guaranty is given to the issuer.

When the guarantor has not specified Item 4 of the preceding article on the bill itself or on an allonge, the date of guaranty shall be the date of issue.

Article 48

No conditions can be attached to the guaranty; if there should be any conditions attached, these will not affect the liability of guaranty on the bill.

Article 49

The guarantor shall be responsible for guaranteeing the bearers' rights to the bill when the bearer has acquired the bill legitimately. This is with the exception of cases when the debt of the person receiving the guaranty is invalid because of the absence of certain items from the bill.

Article 50

Where a bill is guaranteed, the guarantor and the person to whom the guaranty is given shall undertake joint liability to the bearer. In cases where the guaranteed bill has not been paid at its maturity, the bearer is entitled to demand payment from the guarantor, who shall pay the bill in full.

Article 51

In cases where there are two or more guarantors, they shall undertake joint liability.

Article 52

After the guarantor has paid the debt as stipulated in the bill, the guarantor may exercise his right of recourse as enjoyed by the bearer against the person to whom the guaranty is given and his prior parties.

Section 5 Payment

Article 53

The bearer shall present the bill for payment within the following time limits:

1.

A bill payable on sight should be presented to the payer within one month of the date of issue;

2.

A bill payable on a fixed date, within a fixed period after the date of issue or within a fixed period after being seen shall be presented for acceptance within 10 days of the date of maturity.

In cases where the bearer has not presented the bill for payment within the prescribed period as stipulated in the preceding paragraph, the person accepting the bill or the payer shall remain liable for the payment of the bill after the bearer has explained the situation.

Presentation for payment made to the payer by an authorized bank or clearing system for instruments shall be deemed as presentation by the bearer.

Article 54

The payer must pay the bill in full on the day when the bearer presents the bill for payment in accordance with the provisions of the preceding article.

Article 55

The bearer shall sign the bill and give it to the payer after receiving payment. In cases where the bearer authorizes a bank to receive payment on his behalf, the bill may be deemed as having been signed for when the authorized bank has credited the collected sum to the bearer's account.

Article 56

The bank authorized by the bearer to receive payment shall be liable only for crediting the sum on the bill to the bearer's account according to the items specified in the bill.

The bank authorized by the payer to make payment shall be liable only for paying the sum on the bill from the payer's account according to the items specified in the bill.

Article 57

When paying a bill, the payer or his agent shall check the continuity of the series of endorsement, as well as checking the legitimacy of the identification of the person presenting the bill, or the validity of that person's certificates.

In cases where the payer or his agent make a payment out of malice or with gross negligence, they alone shall bear liability.

Article 58

In cases where the payer pays a bill before maturity which is payable on a fixed day or on sight within a fixed period, he alone shall bear liability.

Article 59

When the sum on a bill is expressed in a foreign currency, the sum payable shall be paid in Renminbi according to the market rate of exchange on the day of payment.

Where parties to a bill have stipulated the currency in which the bill is to be paid, the latter agreement shall be followed.

Article 60

Once the payer pays the bill in full, all debtors shall be discharged from liability.

Section 6 Right of Recourse

Article 61

When the payment of a bill has been refused at its date of maturity, the bearer may exercise the right of recourse against the endorsers, the issuer and other debtors of the bill.

Before the maturity of a bill, the bearer may also exercise the right of recourse under any of the following circumstances:

1.

In cases when the payment of the bill has been refused;

2.

In cases when the acceptor or the payer dies or flees;

3.

In cases when the acceptor or the payer has been declared bankrupt according to the law or has been ordered to cease business activities due to their violations of the law.

Article 62

When exercising the right of recourse, the bearer shall be able to provide proof that acceptance or payment was refused.

In cases when the bearer's presentation of the bill for acceptance or payment has been refused, the acceptor or the payer must provide proof of their refusal or a statement noting their reasons for non-payment or non-acceptance. Otherwise, the acceptor or the payer shall bear the civil liabilities arising therefrom.

Article 63

In cases when the bearer is unable to obtain proof of refusal to accept or pay the bill because of the death or flight of the acceptor or payer or other causes, the bearer may procure other relevant proof according to the law.

Article 64

In cases when the acceptor or the payer has been declared legally bankrupt by the people's court, relevant judicial documents from the people's court shall be valid as proof of refusal to accept or pay the bill.

In cases when the acceptor or the payer has been ordered to cease business activities because of his violations of the law, the punitive decision of the relevant administrative authorities shall be valid as proof of refusal to accept or pay the bill.

Article 65

When the bearer cannot provide proof of refusal to accept or pay the bill or a statement noting reasons for non-payment or any other lawful proof within the prescribed period, he shall lose the right of recourse against his prior parties. However, the acceptor or the payer shall still remain liable to the bearer.

Article 66

The bearer shall give written notice of the refusal to accept or pay to his prior party within three days of receiving relevant certification denoting non-acceptance or non-payment; the prior party shall notify his prior party of the notice he has received within three days of receiving the notice. The bearer may also provide written notice to all debtors of the bill at the same time.

In cases when the bearer has failed to provide written notice in accordance with the time specifications noted in the preceding paragraph, the bearer may still exercise his right of recourse. Any party who fails to give notice within the prescribed period shall be liable to compensate his prior parties or the issuer for the losses caused by his delayed notice, but the sum of the damages shall not exceed the sum of the bill.

If the notice has been posted to the legal address or to an agreed address within the prescribed period, then the notice is deemed to have been issued.

Article 67

The written notice, made out according to the first paragraph of the preceding article, shall specify the main items written on the bill and shall clarify the fact that the said bill has been returned.

Article 68

The issuer, endorser, acceptor and guarantor of a bill are jointly liable to the bearer.

The bearer may exercise the right of recourse against any one or all of the persons mentioned in the preceding paragraph without being required to observe the order in which the debtors have become bound.

The bearer who has exercised the right of recourse against one or more of the debtors of the bill, may still exercise these rights against the other debtors. When a person who is being pressed for payment compensates the debt, they shall enjoy the same rights as the bearer.

Article 69

In cases when the bearer is the issuer, he shall have no right of recourse against the bearer's prior parties. In cases when the bearer is the endorser, he shall have no right of recourse against the endorser's subsequent parties.

Article 70

When exercising the right of recourse, the bearer may recover the following expenses from the person against whom he is exercising the right of recourse:

1.

The amount of the unpaid bill;

2.

Interest on this sum at the rate stipulated by the People's Bank of China from the date of maturity of the bill or the date upon which it was presented for payment to the date of payment;

3.

The expenses for the relevant proof of non-payment or non-acceptance and the expenses incurred by issuing notices.

When the person against whom the right of recourse is exercised has settled the debt, the bearer shall hand over the bill and the relevant proof of non-payment or non-acceptance, as well as a receipt detailing the expenses and interest received.

Article 71

When the person against whom the right of recourse is exercised has settled the debt in accordance with the provisions of the preceding article, he may exercise the right of re-recourse against the other debtors and recover the following expenses;

1.

The entire sum paid;

2.

Interest on the said sum at the rate prescribed by the People's Bank of China from the day when the payment was made to the day of reimbursement;

3.

The expenses incurred by issuing notices.

When the person exercising the right of re-recourse has been reimbursed, he shall hand over the bill and the relevant proof of non-payment or non-acceptance as well as a receipt detailing the expenses and interest received.

Article 72

When a person against whom the right of recourse is being exercised has settled the debt according to the stipulations of the two preceding articles, he shall be discharged from any liabilities.

Chapter III Promissory Notes

Article 73

A promissory note is an instrument issued and signed by the issuer promising to unconditionally pay the payee or bearer a set sum of money when the note is presented.

A promissory note as referred to in this Law denotes a banker's promissory note.

Article 74

The issuer of a note must possess reliable financial sources to pay the sum of money in the note and to guarantee payment.

Article 75

The credentials of the note's issuer shall be examined and approved by the People's Bank of China, who shall also stipulate specific administrative measures therefor.

Article 76

A note must specify the following items:

1.

The word "promissory note";

2.

A promise of unconditional payment;

3.

A set sum;

4.

The name of the payee;

5.

The date of issue;

6.

The endorsement of the issuer.

A note shall be null and void if any one of the above-mentioned items is not specified therein.

Article 77

The place of payment and place of issue, if specified on the note, shall be legible and unambiguous.

The place of payment, if not specified on the note, shall be the business premises of the issuer.

The place of issue, if not specified on the note, shall be the business premises of the issuer.

Article 78

The issuer of a note must bear liability for payment when the bearer presents the note.

Article 79

The time limit for the payment of a note shall not exceed two months from the date of issue.

Article 80

In cases when the bearer of a note fails to present the note for payment within the prescribed period, he shall lose the right of recourse against prior parties other than the issuer.

Article 81

In addition to the provisions of this chapter, the provisions of Chapter II of this Law pertaining to bills apply to the endorsement, guaranty and payment of notes and the exercise of the right of recourse.

In addition to the provisions of this chapter, the provisions of Article 24 of this Law pertaining to bills apply to the act of issuing notes.

Chapter IV Cheques

Article 82

A cheque is an instrument issued and signed by the issuer authorizing any bank or any other financial institution whose scope of business involves depositing cheques to unconditionally pay a certain sum of money to the payee or to the bearer at sight.

Article 83

When opening an account in which cheques can be deposited with a bank, the applicant must use his real name and must submit legitimate certification to prove his identity.

When opening an account in which cheques can be deposited with a bank and asking for a cheque book, the applicant must enjoy financial credibility and must deposit a certain amount of funds therein.

When opening an account in which cheques can be deposited with a bank, the applicant shall leave a specimen signature of his real name and a specimen seal therein.

Article 84

Cheques may be payable in cash or payable into an account. If a cheque is payable only into an account, this shall be specified on the face of the cheque.

A form of cash cheque may be specially designed and made for cheques payable in cash and a cash cheque can only be used for payment in cash.

A form of crossed cheque may be specially designed and made for cheques payable into an account and a crossed cheque can not be used for payment in cash but only for settlement into an account.

Article 85

A cheque must specify the following items;

1.

The word "cheque";

2.

Authorization of unconditional payment;

3.

A certain sum;

4.

The name of the payer;

5.

The date of issue;

6.

The signature of the issuer.

A cheque shall be null and void if any one of the above mentioned items is not specified therein.

Article 86

The sum on the cheque may be added to with the authorization of the issuer if the said sum is incomplete. Cheques which are incomplete cannot be used.

Article 87

The name of the payee, if not specified on the cheque, may be completed with the authorization of the issuer.

The place of payment, if not specified on the cheque, shall be the business premises of the payer.

The place of issue, if not specified on the cheque, shall be the business premises, residence or the habitual residence of the issuer.

The issuer may specify himself on the cheque as the payee.

Article 88

The sum specified on a cheque by the issuer shall not exceed the issuer's balance in the bank paying for the cheque at the time of payment.

Where the sum specified in a cheque exceeds the issuer's balance in the bank paying for the cheque at the time of payment, the cheque will bounce. It is prohibited to issue cheques that will bounce.

Article 89

The issuer shall not sign and issue cheques upon which his signature is not the same as his specimen signature or specimen seal.

Article 90

The issuer must bear the liability of guaranteeing payment of the sum specified on the cheque to the bearer.

Where the issuer's balance in the bank paying for the cheque is sufficient to pay the sum of the cheque, the issuer shall pay the full sum on that day.

Article 91

A cheque is payable at sight and does not need to specify the date of payment. A specification of the date of payment shall be invalid.

Article 92

The bearer shall present the cheque for payment within ten days of the date of issue. The time limit within which cheques may be presented for payment in places other than the place of issue shall be stipulated by the People's Bank of China.

After the stipulated time limit has expired, the payer need not pay the cheque; in cases where the payer has not paid, the issuer shall still bear liability for the instrument to the bearer.

Article 93

The payer who has paid the sum of the cheque according to the law shall no longer bear liability to the issuer as the authorized payer, nor liability for payment to the bearer. However, the exception is in cases when the payment is made by the payer through malice or with gross negligence.

Article 94

In addition to the provisions of this chapter, the provisions of Chapter II of this Law pertaining to bills apply to the endorsement and payment of cheques and the exercise of the right of recourse.

In addition to the provisions of this chapter, the provisions of Articles 24 and 26 of this Law shall apply to the issuance of cheques.

Chapter V The Applicable Laws Pertaining Negotiable Instruments in Cases Involving Foreign Elements

Article 95

The applicable laws pertaining negotiable instruments in cases involving foreign elements shall be determined according to the provisions of this chapter.

Instruments in cases involving foreign elements as referred to in the preceding paragraph denotes instruments for whom one or more act of the issue, endorsement, acceptance, guaranty or payment takes place outside the People's Republic of China, while the rest take place within the territory of the People's Republic of China.

Article 96

If any international treaty concluded or acceded to by the People's Republic of China contains provisions differing from those of this Law, the provisions of the international treaty shall apply, unless the provisions are ones on which the People's Republic of China has announced reservations.

International practices may be applied to matters for which neither this Law nor any international treaty concluded or acceded to by the People's Republic of China has any provisions.

Article 97

As regards the capacity for civil conduct of a debtor of an instrument, the law of his own country shall be applicable.

In the event that a debtor of an instrument shall be regarded as a person with no capacity for civil conduct or with limited capacity for civil conduct according to the law of his own country, while he shall be regarded as a person with full capacity for civil conduct according to the law of the place where the action is being carried out, the latter law shall be applicable.

Article 98

Items required to be specified in the issue of bills or notes shall be bound by the law of the place of issue.

Items required to be specified in the issue of cheques shall be bound by the law of the place of issue. However, parties to a cheque may reach an agreement by which the law of the place of payment shall be applied.

Article 99

The endorsement, acceptance, payment and guaranty of an instrument shall be bound by the law of the place where the said action is being carried out.

Article 100

The time limits within which the rights of recourse can be exercised on an instrument shall be bound by the law of the place of issue of that instrument.

Article 101

The time limits within which the instrument should be presented, the way in which proof of refusal to accept or to pay is drawn up and the time limits for drawing up the proof of refusal to accept or to pay shall be bound by the law of the place of payment.

Article 102

In cases when an instrument is lost, the procedure by which the person who has lost the instrument applies to preserve their rights to the instrument shall be bound by the law of the place of payment.

Chapter VI Legal Responsibility

Article 103

Whosoever commits any of the following acts shall be investigated for criminal responsibility in accordance with the law:

1.

The forgery or alteration of an instrument;

2.

The intentional use of a forged or altered instrument;

3.

The signing and issue of a cheque which will bounce or the intentional signing and issue of a cheque whereon the signature or seal is not the same as the specimen signature or seal in order to obtain property by fraudulence;

4.

The signing and issue of a bill or note where no reliable financial sources exist in order to obtain funds by fraudulence;

5.

The false specification of items on a bill or a note by the issuer at the time of issue in order to obtain property by fraudulence;

6.

The fraudulent use of instruments belonging to other people or the intentional use of instruments which are overdue or have been cancelled in order to obtain property by fraudulence;

7.

The malicious collusion of the payer and the issuer or the payer and the bearer to commit any of the preceding acts.

Article 104

Whoever commits any of the acts mentioned in the preceding article, when it is of minor importance and does not constitute a crime, shall be punished by the imposition of administrative penalties according to the relevant provisions of state law.

Article 105

Any staff member of a financial institution who neglects his duties and accepts, pays or guarantees an instrument which does not conform to the provisions of this Law, shall be punished; if this act causes substantial losses and constitutes a crime, he shall be investigated according to the law for criminal responsibility.

If damage has been inflicted on parties to an instrument due to staff members of financial institutions behaving in the manner described in the preceding paragraph, the said institution and the person directly responsible shall bear liability for compensation according to the law.

Article 106

If a payer intentionally delays paying an instrument which is payable on sight or an instrument which has reached maturity, the financial administration department shall fine the payer and punish any personnel directly responsible.

If the payer's intentional delay in payment causes losses to the bearer, then the payer shall bear liability for compensation according to the law.

Article 107

Those who commit other acts violating the provisions of this Law than those for which one shall bear liability for compensation according to the provisions of this Law, and so cause losses to other persons, shall bear civil liability according to the law.

Chapter VII Supplementary Provisions

Article 108

The calculation of all time limits stipulated by this Law shall be bound by the relevant provisions of the General Principles of Civil Law on the calculation of time limits.

When a time limit is prescribed in months, it expires on the corresponding day of the month in which the instrument reaches maturity; if there is no such day, the time limit expires on the last day of the month.

Article 109

The form taken by bills, notes and cheques shall be standardized.

Administrative measures for the form and printing of instruments and relevant documents shall be stipulated by the People's Bank of China.

Article 110

The specific measures taken for implementing the administration of instruments shall be formulated by the People's Bank of China in accordance with this Law, which shall go into effect after being submitted to and approved by the State Council.

Article 111

This Law shall enter into force as of January 1, 1996.