E-Commerce Law of the People s Republic of China (Draft for Comments)

E-Commerce Law of the People s Republic of China (Draft for Comments) 1

Table of Contents Chapter I General Provisions Chapter II E-commerce Business Entities Section 1General Provisions Section 2Third-party E-commerce Platforms Chapter III E-commerce Transactions and Services Section 1E-contracts Section 2E-payment Section 3Express Logistics and Delivery Chapter IV Protection of E-commerce Transactions Section 1E-commerce Data Information Section 2Market Order and Fair Competition Section 3Protection of Consumers Rights and Interests Section 4Dispute Resolution Chapter V Cross-border E-commerce Chapter VI Supervision and Administration Chapter VII Legal Liability Chapter VIII Supplementary Provisions 2

Chapter I General Provisions Article 1 This Law is formulated to promote the sustained and healthy development of e-commerce, regulate market order, and protect the legitimate rights and interests of different stakeholders in e-commerce activities. Article 2 This Law applies to e-commerce activities that occur within the territory of the People s Republic of China or involve e-commerce business entities or consumers within the territory of the People s Republic of China. Article 3 The term e-commerce as used in this Law denotes the business activities of goods or service transactions through the internet and other information networks. If there are special provisions in laws or regulations concerning the goods or services transactions, such provisions shall apply. This law is not applicable to goods or services related to finance, audio and video program broadcasting by information network, online publishing and related content service. Article 4 The State encourages the development of e-commerce as a new business type, innovative business models, and the promotion of the application of new technologies in e-commerce, so as to create a market environment that is conducive to innovation and development. Article 5 E-commerce activities shall be conducted in conformity with the principles of free will, fairness, honesty and good faith and in compliance with accepted business ethics. The State encourages the construction of an e-commerce credit system, and encourages the construction and improvement of an e-commerce credit recording, rating and management system, so as to improve the credit service guarantee system for e-commerce. Article 6 The State allows the market to play a decisive role in resource allocation, and encourages and supports the independent operation according to law of e-commerce business entities and their self-regulation. Article 7 The State Council and local people s governments at or above the county level shall include the development of e-commerce into the national economic and social development plans, formulate scientific and rational industrial policies, improve the construction of standards system, and improve and innovate the system and methods for e-commerce management based on the characteristics of e-commerce activities. 3

Article 8 Industry Self-regulation and Social Co-governance E-commerce industry organizations and business entities shall strengthen industry self-regulation, establish and improve industry norms and network regulations, guide operators in the industry on fair competition, and promote the building of industry integrity. The State encourages, supports, and guides e-commerce industry organizations, business entities, and consumers to participate in the co-governance of the e-commerce market. Article 9 Equal Treatment for Online and Off-line Businesses The State treats on-line and off-line business activities equally and promotes the development of online and offline integration. People s governments at all levels and relevant departments shall not adopt discriminatory policies and measures. Article 10 The State safeguards the security of e-commerce transactions, protects e-commerce user information, encourages the exchange and sharing of e-commerce data, and ensures the orderly flow and rational use thereof. Chapter II E-commerce Business Entities Section 1 General Provisions Article 11 The term e-commerce business entities as used in this Law denotes third-party e-commerce platforms and e-commerce operators. The term third-party e-commerce platform as used in this Law denotes any natural person, legal person or other organization that provides web space, virtual operating places, transactional match-making, the release of information and other services for two or more parties in e-commerce to independently carry out transactional activities. The term e-commerce operator as used in this Law denotes any legal person or other organization, other than third-party e-commerce platforms, that sells goods or provides services through the internet or other information networks. Article 12 E-commerce business entities shall complete industrial and commercial registration in accordance with the law. However, the labor depending on individual skills and not necessary to get the license according to law, family-based handicraft businesses, self-produced and selling agricultural goods and entities not required to complete industrial and commercial registration in accordance with law are not required to complete industrial and commercial registration. Detailed measures shall be formulated by the State Council. When the natural person operates the e-commerce business on the third-party e-commerce platform and if he/she needs to get relevant administrative license, he/she should get the administrative license. 4

Article 13 E-commerce business entities shall engage in business activities in accordance with the law. Administrative permission shall be obtained where such permission is required under the law. Article 14 Sales of goods and provision of services by e-commerce business entities shall comply with provisions of laws and administrative regulations. E-commerce business entities shall not sell goods or provide services which are prohibited by law or administrative regulations. Article 15 E-commerce business entities shall fulfill their legal obligation to pay tax while enjoying their legal rights to preferential taxation in accordance with special tax law. Article 16 E-commerce business entities should issue paper-invoice or e-invoices for goods or services they provide. E-invoices and paper invoices have equal legal effect. Article 17 E-commerce business entities shall disclose information on business licenses and administrative licenses relevant to their business scope on a clearly visible place on their homepage. Changes to information on business licenses or administration licenses of e-commerce business subjects shall be disclosed on a timely basis. Article 18 In the event that an e-commerce operator voluntarily terminates its e-commerce activities, it shall publicize the relevant information in a clearly visible place on its homepage60 days in advance and take necessary measures to protect the legitimate rights and interests of consumers. In the event that a third-party e-commerce platform voluntarily terminates its transaction platform service, it shall publicize the relevant information in a clearly visible placeon its homepage 90 days in advance and take necessary measures to protect the legitimate rights and interests of relevant operators and consumers. Article 19 Section 2Third-party E-commerce Platforms Third-party e-commerce platforms shall examine and register information pertaining to the identity, administrative licenses and other details of e-commerce business operators applying to sell goods or provide services, establish registration files, and verify and update the foregoing periodically. Third-party e-commerce platforms shall inspect and monitor goods and services offered on their platforms, report any violations stipulatedin Articles 13 and 14 of this Law to relevant authorities in a timely manner, and take other required measures. 5

Article 20 The third-party e-commerce platform should provide technical support and assistance to relevant authorities for their enforcement activities in accordance with law. Third-party e-commerce platforms that, in accordance with platform service agreements and transaction rules, warn, suspend or terminate services or take other measures against business operators shall publicize such measures and report information on suspected violations of law to relevant authorities in a timely fashion. Article 21 Third-party e-commerce platforms should take necessary technical and management measures to ensure the normal operation of its platforms. They shall provide the necessary and reliable transaction environment and services to safeguard the security of e-commerce transactions. Third-party e-commerce platforms shall establish contingency plans for emergencies according to the law. In the event of an emergency, they shall immediately start the contingency plans and take appropriate remedial measures, and shall make a report to the relevant departments in accordance with provisions. Article 22 Rule Making and Publicity Third-party e-commerce platforms shall follow the principles of openness, fairness, and impartiality to formulate platform service agreements and transaction rules, and clarify rights and obligations with respect to entering and exiting the platforms, safeguarding the quality of goods and services, and protecting consumers rights and interests. Third-party e-commerce platforms shall clearly and continuously display the platform service agreements and transaction rules on the platform, and technologically ensure that operators and consumers are able to conveniently read these agreements and rules in their entirety, and shall submit the agreements and rules to relevant departments of the authorities for record keeping in accordance with the relevant provisions. Third-party e-commerce platforms shall establish and improve credit rating systems and publicize rules for credit rating so as to provide objective, fair, and reasonable credit ratings. Article 23 Third-party e-commerce platforms shall follow the principle of openness and reasonableness to modify transaction rules, and publicly solicit opinions at conspicuous place of their homepage. Reasonable measures shall be taken to ensure that the parties concerned can timely and fully express their opinions. The modified contents shall be publicized at least seven days in advance. If an operator does not accept the modified contents and applies to exit the platform, the third-party e-commerce platform shall allow the exit and bear relevant responsibilities in accordance with the transaction rules prior to the modification. Article 24 Third-party e-commerce platforms shall conspicuously distinguish their self-operated businesses of goods or services from those of operators on their platforms, and shall not mislead the consumers. Article 25 Third party e-commerce platforms shall record and preserve goods and services 6

information posted on their platforms as well as transaction information, and shall ensure the veracity, completeness and accuracy of such information. Goods and services information and transaction information shall be kept for no less than three years from the date when the transaction is concluded. Where the law has provided otherwise, then such provisions shall apply. Article 26 Chapter III E-commerce Transactions and Services Section 1 E-contracts The provisions of this law shall apply to e-contracts entered into by the parties concerned. Matters not covered by this Law shall be governed by the provisions of the Contract Law of People s Republic of China and the Law of the People s Republic of China on Electronic Signatures. Article 27 The parties to an e-contract are presumed to have the appropriate capacity for civil conduct in e-commerce activities and have the ability to truly indicate their intent unless there is evidence to prove the opposite. Article 28 If information on commodities and services released by an e-commerce business entity complies with the terms of an offer, a contract is entered into when the parties concerned selects such goods or services and submits the order. If the parties have agreed otherwise, such agreements shall prevail. Where an offer or promise is made in electronic form, the time when the recipient can retrieve and identify the offer or promise shall be deemed as the arrival time of such offer or promise. Article 29 The act of concluding or fulfilling contracts by the parties to e-contracts using an automated transaction information system shall have legal effect on the parties using such system. Article 30 If an automated transaction system is used for e-contracts and if a user makes an input error during the human-machine interaction and the system does not provide a means for correcting the error, the user is entitled to withdraw the part in which the input error was made if: (a) (b) Article 31 the user immediately notified the other party about the occurred input error; and the user does not obtain any substantial benefits or value from the other party. Section 2 E-payments The term e-payment as used in this law means the act of the payer and the payee transferring monetary assets through the form of electronic payment orders for the 7

purposes of e-commerce. The People s Bank of China and the banking regulatory authority under the State Council shall, according to law, shall supervise and administrate the e-payment service providers. Article 32 E-payment service providers shall provide secure payment services. If the service provided by an e-payment service provider does not satisfy relevant requirements of the state finance information security administration and causes losses of an e-payment service recipient, the service provider shall bear the responsibility of returning the fund, making up for the difference, and compensating the payable interest loss. If an e-payment service provider opens accounts for a recipient of the e-payment service, the accounts shall be opened using the recipient s real name. No anonymous or pseudonym accounts shall be opened. The e-payment service providers shall inform the e-payment service recipients of the functions, methods of use, matters needing attention, related risks, fee standards and other matters concerning the e-payment service. No unreasonable transaction terms shall be attached. The e-payment service providers shall ensure the integrity, consistency, traceability, and non-tampering of the e-payment instructions. The e-payment service providers shall provide, free of charge, the e-payment service recipients with statement of account and transaction records of the most recent three years. Article 33 The recipients of the e-payment service shall provide the e-payment service providers with real and valid identity information and contact information, and notify the e-payment service providers timely about any modification made to the relevant information. The e-payment service recipients shall, in accordance with their agreement with the e-payment service providers, use the e-payment service within the legal scope, pay the service fee, and properly keep the transaction password, the electronic signature data and other security tools. If an e-payment service recipient find that his/her security tools have lost or been stolen or there exist unauthorized transactions, he/she shall promptly notify the e-payment service provider. Article 34 After an e-payment service provider has completed the e-payment, it shall promptly and accurately provide the e-payment service recipients with the agreed payment confirmation information. If an e-payment instruction fails to be executed successfully, the e-payment service provider shall prompt the e-payment service recipient in a timely manner and take the necessary remedial measures. Article 35 The recipients of the e-payment service shall be responsible for the correctness of the payment instruction they issue. They shall check the whole information contained in the payment instruction, including the amount and the payee, before issuing the instruction. If an error occurs to a payment instruction, the e-payment service provider shall promptly find out the reasons and take appropriate measures to correct the error. If the 8

error has caused losses to e-payment service recipients, the e-payment service provider shall bear the liability for compensation unless it can prove that the payment error was not caused by its own reasons. Article 36 If an e-payment service provider discovers an unauthorized payment instruction or receives a notice from an e-payment service recipient about an unauthorized payment instruction, it shall take immediate measures to prevent the loss from expanding. If the e-payment service provider fails to do so, it shall bear the responsibility for the expanded part of the loss. Losses caused by unauthorized payments shall be borne by the provider of the e-payment service unless otherwise provided by law. If it can be proven that the unauthorized payment is due to the fault of the e-payment service recipient, and the e-payment service provider can prove that it is not at fault, the e-payment service provider shall not be liable. Article 37 The e-payment service providers shall not misappropriate the payment reserves. The e-payment service recipients could require the e-payment service providers to transfer their payment reserves to their original settlement accounts according to negotiation. The e-payment service providers shall not set obstacles or charge unreasonable fees for the transfer. The term payment reserves as used in this law means the payable monetary fund a non-banking payment institution, as an e-payment services provider, has actually received in advance for its payment business as entrusted by the e-payment service recipients. Article 38 Section 3 Express Logistics and Delivery The establishment, modification, and termination of express logistics service providers and the provision of express logistics services for e-commerce shall comply with the relevant provisions of laws and administrative regulations. If an express logistics service provider provides services for e-commerce by joining an alliance, it shall have the business qualification for both the alliance s territory and the business scope. It shall also sign a written agreement to define rights and obligations. The term joining an alliance as used in this law means the act of more than two express logistics service providers providing the express logistics service by forming a service network and abiding by the common service agreement through adopting a unified trademark, trade name or waybill in accordance with the relevant laws and administrative regulations. Article 39 Express logistics service providers shall make public their service commitments. If there is any modification made to the service commitments, such modification shall be publicized in a timely manner. Express logistics service providers shall strengthen the construction of an information-based, networked and standardized logistics service, and standardize data processing and data management procedures to ensure that the operation information is accurate and traceable. 9

Express logistics service providers shall compensate, according to law, for the delay, loss, damage or shortage occurred to the e-commerce transaction goods in the process of the logistics service. If the express logistics service is provided in the form of joining an alliance, the joining party and the joined party shall bear the joint and several liability. Article 40 Express logistics service providers shall establish and strictly implement operating technical standards to ensure the security of the logistics service process. When accepting e-commerce transaction items for delivery, express logistics service providers shall fulfill their inspection obligation and shall not accept items whose delivery and transport are prohibited by the State. Article 41 Express logistics service recipients shall truthfully fill out the express logistics waybill. Express logistics service providers shall check the waybill information, and shall not accept the items with incomplete or inaccurate waybill information. If an express logistics service provider has a special agreement with the recipients or provides the payment collection service, it and the express logistics service recipients shall clarify in the contract the rights and obligations for delivering, checking and accepting the e-commerce transaction items. Article 42 Express logistics service providers that provide the payment collection service shall establish a strict system for cash and security management and risk control. Express logistics service providers shall sign an agreement with the e-commerce business entities to provide for charging standards, service forms, dispute settlement and other issues. The term payment collection as used in this law means the value-added service of payment collection and settlement which the express logistics service providers provide for e-commerce business entities using their service network and resources in the course of providing the express logistics service. Article 43 The e-commerce business entities shall not specially charge consumers an express logistics service fee higher than the service price publicized by the express logistics service providers, and shall not use their own business advantages to restrict the scope of express logistics service providers that consumers can choose from. Article 44 If the object of an e-contract is the delivery of goods and delivered by express logistics service, the time when the express logistics service recipient signs to confirm the receipt of the goods shall be deemed as the delivery time. If the object of an e-contract is providing services, the time specified on the generated electronic or physical voucher shall be deemed as the delivery time. If the object of an e-contract is a digital product to be provided on-line, the time when the party with the delivering obligation delivers the retrievable and identifiable digital product to a specific system designated by the other party shall be deemed as the delivery time. If the parties to an e-contract have agreed otherwise on the delivery method and time for goods, services and digital products, the agreement shall prevail. 10

Chapter VI Protection of E-commerce Transactions Section 1 E-commerce Data Information Article 45 E-commerce users enjoy the right to decide their own personal information at their discretion in accordance with the law. The term Personal information as used in this Law refers to the names, ID numbers, addresses, contact ways, location information, bank card information, transaction records, payment records, express logistics records etc. collected by e-commerce business operators through their e-commerce activities, which information can be used individually or in combination with other information to identify a specific user s information. Article 46 E-commerce business operators shall collect users personal information according to legitimate, proper and necessary principles, expressly explain to users the rules for collecting, processing and utilizing information in advance and shall obtain the users consent. E-commerce business operators shall not, on the grounds of refusing to provide users services, force users to agree the collection, processing and utilization of personal information. It is prohibited to collect personal information through illegal transaction, invasion, fraud, coercion or other means without authorization from users. E-commerce business operators shall not revise the rules for collecting, processing and utilizing personal information, unless otherwise agreed by users. If users do not agree, e-commerce business operators shall provide appropriate remedies. Article 47 Users have right to inquire about their related personal information. Ife-commerce business operators receive the inquiry requests from users, they shall promptly provide inquiry results after verifying the user s identity. If users require a correction or supplement to erroneous information, e-commerce business operators shall promptly correct and supplement. Article 48 E-commerce business operators shall process and utilize personal information according to rules for processing and utilization agreed by users. If e-commerce business operators behavior of processing or utilizing personal information infringes the legitimate rights and interests of users, users have right to request the e-commerce business operators suspend the relevant behavior. If e-commerce business operators change the purpose, manner and scope of processing and use agreed when collecting information, they shall inform users and obtain their express consent. Upon the expiry of the statutory or agreed storage period,e-commerce business operators shall on their own or in response to a user request, delete or stop processing and utilizing the relevant personal information, or destroy it. 11

Article 49 E-commerce business operators shall establish a sound internal control system and technical administration measures, to prevent leakage, loss, damage of information and to ensure the security of e-commerce data and information. If users personal information is or is likely to be disclosed, lost or damaged, e-commerce business operators shall immediately take remedial measures, promptly inform users, and report to the relevant departments. Article 50 If e-commerce business operators exchange or share-commerce data and information, the data and information shall undergo the necessary processing such that it cannot identify particular individuals and the terminal and cannot be recovered. Article 51 E-commerce business operators shall provide e-commerce data and information to the relevant department of the State according to laws and regulations; and the relevant department shall take necessary measures to protect the security of the relevant data and information. Article 52 The State takes effective measures to promote the establishment of sharing mechanism for public data, facilitate e-commerce business operators to utilize public data according to law and safeguard the authenticity, reliability and security of e-commerce transactions. Section 2 Market Order and Fair Competition Article 53 E-commerce business entities shall protect intellectual property according to the law and establish rules for intellectual property protection. If the third party e-commerce platform is aware of the intellectual property infringement by the e-commerce business entities on its platform, it shall take necessary measures including deletion, screening, disconnection, and termination of transactions and services. Article 54 In the event that a third-party e-commerce platform receives a notice from an intellectual property rights holder of an act of intellectual property infringement committed by a business operator on the platform, the platform shall forward the notice to the business operator and take necessary measures according to the law. Intellectual property rights holders shall bear civil liability for losses suffered by platforms due to errors in their notices. In the event that the business operator, after receiving the notice forwarded by the platform, submits a statement to the platform guaranteeing that no infringement has taken place, the platform shall terminate the measures taken in a timely fashion, forward the business operator s statement to the intellectual property rights holder who sent the notice, and inform the intellectual property rights holder that it can file a complaint with relevant administrative authorities or file a civil suit with People s Courts. 12

Third party e-commerce platforms should timely publicize notices and statements received as well as resolutions thereof. Article 55 The following acts of unfair competition are prohibited while conducting e-commerce activities: Article 56 (1) Unauthorized use of the main portion of domain names, website names, page names and other markings that are similar or identical to those of well-known enterprises markings which mislead the public and result in market confusion; (2) Fake links, confusing links and other improper links; (3) Attacks or invasions to other business operators networks, malicious access, interception, tampering with other business operators online shops, affecting normal business activities; (4) Unauthorized use of electronic signs of government departments or social organizations, misleading people; (5) Making use of service agreements and other means to restrict transaction, overcharge or append unreasonable transaction conditions; (6) Other acts of unfair competition stipulated by laws and regulations. The following acts damaging to e-commerce credit rating shall not be implemented when engaging in e-commerce activities: (1) Enhancing ones own or another s business reputations through fictitious transactions, deleting adverse evaluations, making compensations or other conditions in exchange for favorable evaluations. (2) Making malicious evaluations which are contrary to the facts of transactions and damaging commercial reputations of others; (3) Harassing or threatening the other party to the transaction, forcing the other party to make, modify, and delete evaluations of goods or services against its wills; (4) Tampering with or selectively disclosing the credit rating records of e-commerce business operators; (5) Publishing untruthful credit rating information; (6) Other violations of laws and regulations, as well as the objective, fair and reasonable principles of credit rating. Article 57 Section 3 Protection of Consumer Rights and Interests E-commerce business operators shall comprehensively, truthfully and accurately disclose information of goods or services and safeguard the consumers rights to know and choose. 13

Article 58 Producers and sellers of goods shall be responsible for the quality of goods they provide; and the service providers shall be responsible for the quality of services they provide. If the legitimate rights and interests of consumers are damaged due to purchasing goods or receiving services through e-commerce third-party platforms, they may claim compensation from the producers and sellers of goods, or the service providers. If the third party e-commerce platform could not provide the consumer with the business operator s real name, address and other valid contact, the consumer could ask for compensation from the third party e-commerce platform firstly; after compensating to the consumer, the third party e-commerce platform is entitled to claim the compensation from the business operator on the platform. Article 59 E-commerce business entities shall guarantee the completeness of goods sold or services provided. Any unreasonable split of goods or services is prohibited; any charge of unreasonable separate costs is prohibited. Article 60 E-commerce business operators shall ask for opinions of consumers and consumer organization for formulating or modifying transaction rules and standard terms. Article 61 The third party e-commerce platforms are encouraged to establish guarantee mechanism for the goods or service quality. If e-commerce third-party platforms and operators set up deposits for consumers rights and interests, both parties shall make clear agreements on withdrawal amounts, management, utilization and refund methods of deposits for consumers rights and interests. Article 62 When consumers purchasing goods or receiving services on third-party e-commerce platforms have disputes with the operators on the platform, the platforms shall proactively assist consumers in safeguarding legitimate rights and interests thereof. Article 63 Section 4 Dispute Settlement Disputes between the parties involved in e-commerce activities can be settled through negotiation, request for consumer organizations, industry associations or other legally formed mediation organizations to mediate, complaints to relevant departments of the authorities, instituting arbitration proceedings or bringing lawsuits with People s Courts and other means. Article 64 The State encourages each e-commerce operator to establish online dispute settlement mechanism. 14

Article 65 E-commerce third-party platforms may establish dispute settlement mechanism, formulate and disclose rules for dispute settlement, and fairly and justly settle the disputes between the parties. The parties may adopt the dispute settlement mechanism provided in the preceding article to handle disputes. If the parties disagree with the handling decisions, they may bring an arbitration or a lawsuit according to law. Article 66 For any dispute between the operators on the platform and third-party platforms, in case there are many operators on the platform with a common request, they may elect a representative to participate in consultation, conciliation, arbitration and litigation. Chapter V Cross-border E-commerce Article 67 Cross-border e-commerce refers to engaging in business activities of import and export of goods or services through the Internet and other information networks. Natural persons, legal persons, or other organizations engaged in cross-border E-commerce shall comply with the relevant national laws and regulations on import and export supervision and administration, truthfully provide data and information in connection with orders, logistics, payments and transactions to the national import and export administration, and assume the corresponding legal liabilities. Article 68 The State promotes the development of cross-border e-commerce, and supports small and micro businesses, cross-border e-commerce comprehensive service providers and relevant service businesses to carry out operations according to law. Cross-border e-commerce comprehensive service providers refer to the operators accepting commissions of providing customs clearance, inspection& quarantine and other import and export procedures and the relevant credit financing and other services to others in cross-border e-commerce activities. Article 69 The State Import and Export Administration shall establish cross-border e-commerce customs clearance, taxation, inspection& quarantine and other systems and promote the construction of Single Window, to realize information sharing, supervision and mutual recognition, law enforcement and mutual assistance, to enhance the clearance efficiency, to safeguard trade security and to promote trade facilitation. Article 70 The State boosts the digitization of import and export declarations, taxations, inspections & quarantines and other links for e-commerce activities. Electronic lists, electronic taxation lists and other electronic documents have the same legal effect as paper documents. Cross-border e-commerce business operators may, on the basis of electronic documents, go through relevant procedures at the national import and export administration. 15

Article 71 E-commerce business operators carrying out cross-border e-commerce activities shall protect personal information and commercial data obtained from their transactions according to law. The State shall establish a storage, exchange and protection mechanism for cross-border e-commerce transaction data. Article 72 When engaging in cross-border e-commerce activities, the provisions of this Law, other relevant laws, and the international treaties, conventions concluded or participated by the People s Republic of China shall be complied with. Article 73 The State promotes the establishment of e-commerce communication and cooperation with different countries and regions, participates in formulation of e-commerce international rules, and facilitates international mutual recognition of e-signatures and e-identities. The State promotes and establishes cross-border e-commerce dispute settlement systems with different countries and regions. Chapter VI Supervision and Administration Article 74 The relevant departments of the State Council carry out supervision and administration according to this Law, relevant laws and administrative regulations. Local people's governments at or above the county level may, according to the actual circumstances in their administrative areas, determine the division of administrative responsibilities among departments of e-commerce within these administrative areas. Article 75 The State Council shall establish a comprehensive coordination mechanism for e-commerce administration and sets up a cooperative administration system in line with the characteristics of e-commerce. Article 76 The State promotes the e-commerce infrastructure construction, the improvement of e-commerce statistics and promotes e-commerce standardization work. Article 77 Administrative regulations, rules and local regulations related to e-commerce formulated by the State Council, its relevant departments and local authorities shall neither violate this Law and relevant laws nor eliminate or limit market competition. Article 78 E-commerce business operators and third-party credit rating organizations shall establish a credit rating system, publish rules for credit rating, provide credit rating 16

serves, share credit rating information, and implement discrediting linkage punishment mechanism to serious violators who have bad credit records. Article 79 Relevant departments of People's Governments at all levels, industry associations, e-commerce business entities, consumers and other organizations develop an e-commerce administration model enabling multi-party co-governance. Article 80 E-commerce industry organizations shall fulfill their industry self-regulation responsibilities, formulate industry self-regulation specifications, accept guidance, supervision and inspection from relevant departments of the people s governments at all levels; and guide and standardize the e-commerce business operators to produce and operate according to law. Chapter VII Legal Liability Article 81 E-commerce business operators shall assume civil liability according to this Law and other relevant laws and regulations for any loss to others caused by the goods or servicesthey provide. Article 82 For e-commerce business operators that violate Article 13, paragraph 2 of Article 14, paragraph 1 of Article 20 of this Law, administrative authorities shall order them to make corrections within a time limit, and impose an administrative penalty according to law. Article 83 If an e-commerce business operator violates Article 17, Article 18, the paragraph 2 of Article 20, Article 22 or Article 23 of this Law, the relevant departments of the people s governments at all levels shall order the offender to make corrections within a time limit, and impose a fine of not less than RMB 30,000 but not more than RMB 100,000. Article 84 In the event that a third-party e-commerce platform violates the provisions of Articles 19, 21, 24 and 25 of the present law by failing to fulfill the obligations of verifying identities of operators on the platforms, information inspection and monitoring, providing stable and safe services, distinguishing self-operated businesses and non-self-operated businesses, and preserving goods and services information and transaction information, relevant departments of People s Governments at all levels shall order to make corrections within limited periods of time; if corrections were not made within the periods, relevant government department could order the suspension of production and business operations for rectification and impose a fine ranging from RMB 30,000 to RMB 100,000 while in serious cases, relevant government department could revoke the business license and impose a fine ranging from RMB 10,000 to RMB 50,000. Article 85 If an e-payment service providers violates Article 32(1), Article 32(2) and Article 37 of this Law by failing to fulfill the guarantee of security of payment services, failing to fulfill 17

the obligations of managing account real-name system, utilizing and managing payment reserves, the people's bank and banking regulatory authority shall, according to respective authority, order to make corrections within a time limit; impose fines of not less than RMB 100,000 but not more than RMB 500,000 to units, not less than RMB 30,000 but not more than RMB 100,000 to the persons directly in charge and other persons directly responsible; illegal incomes shall be confiscated; for serious cases or the corrections have not been made within the time limit, order to suspend business for rectification until the revocation of business licenses. Article 86 If an express logistics service provider violates Article40 of this Law, to mail or transport contraband goods, the relevant departments of the people s governments at all levels shall impose a fine of not less than RMB 100,000 but not more than RMB 500,000, unless otherwise provided by law. If an e-commerce business operator violates Article43 of this Law, the relevant departments of the people s governments at all levels shall, according to the seriousness of circumstances, impose a warning, confiscate illegal incomes, or a fine of not less than RMB30,000 but not more than RMB 100,000. Article 87 If an e-commerce business operators violate Article 46, Article 47, Article 48, Article 49 and Article 50 of this Law by failing to fulfill the obligation of protecting the personal information of e-commerce consumers, the relevant departments of the people s government at all levels may, according to the circumstances, impose warnings, a fine of not less than RMB 30,000,but not more than RMB 500,000, separately or jointly; in serious cases, they may order the suspension of operations for correction up to the revocation of business licenses. Article 88 If the third party e-commerce platform fails to take necessary measures when being aware of the intellectual property infringement in violation of the provisions of Article 53 of this Law, relevant departments of People s Governments at all levels shall order to make corrections within limited periods of time; if corrections were not made within the periods, relevant government department could order the suspension of production and business operations for rectification and impose a fine ranging from RMB 30,000 to RMB 100,000 while in serious cases, relevant government department could revoke the business license and impose a fine ranging from RMB 10,000 to RMB 50,000 Article 89 E-commerce business entities that violate Articles 55 of this Law and provisions of Unfair Competition Law of the People's Republic of China shall be punished in accordance with provisions of Unfair Competition Law of the People's Republic of China. If the e-commerce business entities violate Article 56 of this law, relevant departments of People s Governments at all levels shall order to make corrections within limited periods of time; if corrections were not made within the periods, relevant government department could order the suspension of production and business operations for rectification and impose a fine ranging from RMB 30,000 to RMB 100,000 while in serious cases, relevant government department could revoke the business license and impose a fine ranging from RMB 10,000 to RMB 50,000. 18

Article 90 If an e-commerce business operator violates Article58, Article59 of this Law, Law of the People s Republic of China on the Protection of Consumer Rights and Interests, Law of the People s Republic of China on Product Quality, Law of the People s Republic of China on Metrology to infringe consumers rights and interests, they shall be punished by relevant departments of People s Governments at all levels according to relevant laws and regulations. Article 91 E-commerce business entities that violate provisions of this Law shall bear liability for civil damages and payment of fines or penalties. In case their assets are not sufficient to fulfill payments simultaneously, liability for civil damages shall be undertaken first. Article 92 If the relevant departments of the people s governments at all levels and their personnel violate this Law to fail to fulfill the obligation of protecting data and information provided in this Law, their superior authorities or relevant authorities shall order them to make corrections; the persons directly in charge and other directly responsible persons shall be punished according to law; in case of causing damages to properties of e-commerce business operators and consumers, e-commerce business operators and consumers are entitled to compensation. If any staff of the department legally responsible for e-commerce supervision and administration neglects duty, abuses authority, plays favoritism, but does not constitute a crime, it shall be penalized according to law. Article 93 In the event violations of provisions of this Law constitute a crime, criminal liability shall be pursued according to law. Chapter VIII Supplementary Provisions Article 94 This Law shall be enter into effect from[mm/dd/yy]. 19