Chapter III

Parties to Auction

Section 1

Auctioneer

Article 10 An auctioneer refers to an enterprise legal person that is established in accordance with this Law and the Company Law of the People's Republic of China and engaged in activities of auction.

Article 11 Auction enterprises may be established in cities divided into districts. Establishment of an auction enterprise shall be subject to examination, verification and permission by the department in charge of the auction trade under the people's government of the province, autonomous region, or municipality directly under the Central Government in the place where the enterprise is to be established and shall be registered with the administrative department for industry and commerce for obtaining of a business license.

Article 12 To establish an auction enterprise, the following conditions shall be satisfied:

(1) having a registered capital of RMB one million yuan or more;

(2) having its own name, organizational structure, premises and articles of association;

(3) having auction masters and other employees commensurate to the trade;

(4) having rules for the auction trade that conform to the provisions of this Law and other relevant laws;

(5) complying with the regulations of the State Council regarding development of the auction trade; and

(6) other conditions as provided for by laws or administrative regulations.

Article 13 An auction enterprise engaged in the auction of cultural relics shall have a registered capital of 10 million yuan or more and employees equipped with the professional knowledge about auction of cultural relics.

Article 14 Auction activities shall be presided over by auction masters.

Article 15 An auction master shall satisfy the following requirements:

(1) having acquired a 3-year college education or a higher education and professional knowledge about auction;

(2) having worked two years at least in an auction enterprise; and

(3) being a person of good conduct.

If a person has been discharged from public employment or his qualification certificate of auction master rescinded for less than five years or has been subjected to criminal punishment for intentional offense, he shall not be employed as an auction master.

Article 16 Examination for qualification of auction masters shall be arranged exclusively by the Auction Trade Association. Persons who pass the examination shall be issued qualification certificates for auction masters by the said association.

Article 17 The Auction Trade Association is a public organization legal person established in accordance with law and a self-disciplined organization for the trade of auction. The Auction Trade Association shall, in accordance with this Law and its own articles of association, exercise supervision over auction enterprises and masters.

Article 18 An auctioneer shall have the right to request his clients to make clear the origins and defects of the objects of auction.

An auctioneer shall make defects of the objects of auction known to bidders.

Article 19 An auctioneer shall have the obligation of taking care of the articles or goods delivered by his clients to him for auction sale.

Article 20 After accepting authorization, the auctioneer may not authorize another auctioneer to perform the auction without prior consent of his client.

Article 21 An auctioneer shall keep the identity of his client or vendee confidential if so requested.

Article 22 An auctioneer and his employees may not get involved as bidders in the auction sale which is arranged by themselves and may not authorize another to act as a bidder on their behalf.

Article 23 An auctioneer may not put his own articles or goods or property rights on an auction sale which is arranged by himself.

Article 24 When an auction transaction is concluded, the auctioneer shall deliver the money paid for the objects of auction to the clients as agreed and transfer the objects of auction to the vendees as agreed.