Protection of Payments for Small and Medium-sized Enterprises Ordinance

Decree of The State Council of the People's Republic of China

第728号

The Regulations on Safeguarding Payment of Small and Medium-sized Enterprises, adopted at the 99th Executive Meeting of The State Council, are hereby promulgated。

总　理　　李克强

Protection of Payments for Small and Medium-sized Enterprises Ordinance

Article 1 These Regulations are formulated in accordance with the Law of the People's Republic of China on the Promotion of Small and Medium-sized Enterprises and other laws in order to promote timely payment of small and medium-sized enterprises by state organs, public institutions and large enterprises, safeguard the legitimate rights and interests of small and medium-sized enterprises and optimize the business environment。

Article 2 State organs, public institutions and large enterprises purchasing goods, projects and services and paying small and medium-sized enterprises shall abide by these Regulations。

The term "small and medium-sized enterprises" as mentioned in these Regulations refers to the medium-sized enterprises, small enterprises and micro enterprises established in the territory of the People's Republic of China according to law and determined in accordance with the criteria for the division of small and medium-sized enterprises approved by The State Council;The term "large enterprises" refers to enterprises other than small and medium-sized enterprises。

Small and medium-sized enterprises and large enterprises shall be determined according to the size type of enterprises when the contract is concluded。When entering into contracts with government agencies, public institutions and large enterprises, small and medium-sized enterprises shall take the initiative to inform them that they are small and medium-sized enterprises。

Article 4 The departments under The State Council responsible for the overall management of the promotion of small and medium-sized enterprises shall conduct macro-guidance, comprehensive coordination, supervision and inspection of the timely payment of funds to small and medium-sized enterprises by state organs, public institutions and large enterprises;The relevant departments under The State Council shall be responsible for the relevant administrative work within the scope of their respective functions and duties。

The local people's governments at or above the county level shall be responsible for the administration of timely payment of funds to small and medium-sized enterprises by organs, public institutions and large enterprises within their respective administrative areas。

The relevant trade associations and chambers of commerce shall, in accordance with laws and regulations and the articles of association, improve the self-discipline of the industry, prohibit large enterprises in the industry from taking advantage of their dominant position to refuse or delay the payment of small and medium-sized enterprises, standardize and guide them to fulfill the obligation of timely payment of small and medium-sized enterprises, and protect the legitimate rights and interests of small and medium-sized enterprises。

Article 6 State organs, public institutions and large enterprises shall not require small and medium-sized enterprises to accept unreasonable payment terms, methods, terms, liabilities for breach of contract and other trading conditions, and shall not default on the payment of goods, projects and services owed to small and medium-sized enterprises。

Small and medium-sized enterprises shall operate in accordance with the law, be honest and trustworthy, and provide qualified goods, projects and services in accordance with the contract。

When purchasing goods, projects and services from small and medium-sized enterprises with financial funds, state organs and public institutions shall strictly follow the approved budgets and shall not conduct procurement without or over budget。

The funds required for government investment projects shall be ensured in accordance with the relevant provisions of the State, and shall not be financed by the construction unit。

Article 8 State organs and institutions that purchase goods, projects and services from smes shall make payments within 30 days from the date of delivery of the goods, projects and services;If otherwise agreed in the contract, the period of payment shall not exceed 60 days。

When large enterprises purchase goods, projects and services from small and medium-sized enterprises, they shall reasonably agree on a payment period and make timely payment in accordance with industry norms and trading practices。

If the contract provides for settlement in the form of progress settlement, periodic settlement, etc., the payment period shall be calculated from the date of confirmation of the settlement amount by both parties。

Article 9 Where the government organs, public institutions, large enterprises and small and medium-sized enterprises agree that payment to the small and medium-sized enterprises is conditional on the goods, projects and services passing the inspection or acceptance inspection after delivery, the payment period shall be counted from the date of passing the inspection or acceptance inspection。

Both parties shall stipulate in the contract a clear and reasonable time limit for inspection or acceptance, and complete the inspection or acceptance within the time limit。Where the government organ, public institution or large enterprise delays the inspection or acceptance inspection, the payment period shall be counted from the date when the agreed inspection or acceptance period expires。

Article 10 State organs, public institutions and large enterprises use non-cash payment methods such as commercial bills to pay small and medium-sized enterprises，A clear and reasonable agreement shall be made in the contract，Small and medium-sized enterprises shall not be forced to accept non-cash payment methods such as commercial bills，Non-cash payment methods such as commercial bills shall not be used to extend the term of payment in a disguised way。

Article 11 No state organ, public institution or large state-owned enterprise shall be forced to require the audit results of the audit institution to be used as the basis for settlement, except as otherwise agreed in the contract or provided for by laws or administrative regulations。

Article 12 In addition to the bid security deposit, performance security deposit, project quality security deposit and wage security deposit for migrant workers established in accordance with law, no other security deposit shall be collected in the construction of a project。The proportion of deposit collected shall conform to the relevant provisions of the State。

Government organs, public institutions and large enterprises may not limit the deposit to cash。If a small and medium-sized enterprise provides a guarantee by a guarantee letter from a financial institution, the government organ, public institution and large enterprise shall accept it。

The government organs, public institutions and large enterprises shall, in accordance with the contract, verify and settle the deposit collected with the small and medium-sized enterprises in a timely manner after the expiration of the guarantee period。

Article 13 Organs, institutions and large enterprises may not change their legal representatives or principal persons in charge, perform their internal payment procedures, or refuse or delay payment of funds to small and medium-sized enterprises on the grounds of waiting for the approval of the completion and acceptance inspection or the audit of final accounts without any agreement in the contract。

Article 14 Where small and medium-sized enterprises secure financing by accounts receivable, the state organs, public institutions and large enterprises shall confirm the creditor's debt relationship within 30 days from the date of the request for confirmation of the right of the small and medium-sized enterprises, and support the financing of the small and medium-sized enterprises。

Article 15 Where government organs, public institutions and large enterprises delay in making payments to small and medium-sized enterprises, they shall pay overdue interest。If the parties agree on the interest rate of the overdue interest, the agreed interest rate shall not be lower than the quoted interest rate of the 1-year loan market at the time of conclusion of the contract;If no agreement is made, the overdue interest shall be paid at the daily interest rate of 0.5 million。

Article 16 Organs and institutions shall, before March 31 of each year, disclose information such as the number and amount of contracts for overdue payments to small and medium-sized enterprises in the previous year through websites, newspapers and other means that are convenient for the public to know。

Large enterprises shall include the number and amount of overdue contracts that have not yet paid small and medium-sized enterprises into their annual reports and publicize them to the public through the enterprise credit information publicity system。

Article 17 The departments responsible for the comprehensive management of the promotion of small and medium-sized enterprises under the people's governments at or above the provincial level shall establish convenient and smooth channels to accept complaints about the refusal or delay in payment of funds to small and medium-sized enterprises by organs, public institutions and large enterprises。

The complaint accepting department shall, in accordance with the principle of "territorial management, hierarchical responsibility, who is in charge of who is responsible", promptly transfer the complaint to the relevant department and the local people's government for handling, the relevant department and the local people's government shall handle the complaint in a timely manner in accordance with the law, and inform the complainant of the handling result, and at the same time feedback to the complaint accepting department。

Organs, public institutions and large enterprises do not fulfill the obligation to pay small and medium-sized enterprises in a timely manner, and the circumstances are serious, the complaint department may incorporate its faithless information into the national credit information sharing platform in accordance with the law, and publicize the relevant enterprise-related information to the society through the enterprise credit information publicity system, and implement punishment for faithless according to the law。

Article 18 The organs, institutions and large enterprises under complaint and their staff shall not intimidate or retaliate against the complainants in any form。

Article 19 The state organs and institutions that refuse or delay the payment of funds to small and medium-sized enterprises shall take necessary restrictive measures in terms of official consumption, office occupancy and funding arrangements。

Article 20 Auditing institutions shall, in accordance with law, exercise auditing supervision over payments made by government organs, public institutions and large state-owned enterprises to small and medium-sized enterprises。

Article 21 People's governments at or above the provincial level shall establish an inspection system to supervise and inspect the timely payment of funds to small and medium-sized enterprises。

Article 22 When the State carries out the assessment of the development environment and the business environment of small and medium-sized enterprises in accordance with the law, it shall include the timely payment of small and medium-sized enterprises into the assessment and evaluation content。

Article 23 The department of The State Council responsible for the general administration of the promotion of small and medium-sized enterprises shall, in accordance with the standards for the classification of small and medium-sized enterprises approved by The State Council, establish a testing platform for the size and type of enterprises and provide self-testing services for the size and type of small and medium-sized enterprises。

Where there is a dispute over the size and type of small and medium-sized enterprises, an application may be made to the department responsible for the comprehensive administration of the promotion of small and medium-sized enterprises under the local people's government at or above the county level where the party claiming to be a small and medium-sized enterprise is located。

Article 24 The State encourages legal service institutions to provide legal services to small and medium-sized enterprises that have payment disputes with government organs, public institutions and large enterprises。

The news media shall carry out public welfare publicity on the relevant laws, regulations and policies of timely payment of small and medium-sized enterprises, and strengthen public opinion supervision on the refusal or delay of payment of small and medium-sized enterprises by organs, public institutions and large enterprises in accordance with the law。

Article 25 Where an organ or institution violates these Regulations in any of the following circumstances, the organ at a higher level or the competent department shall order it to make corrections;If the party refuses to make corrections, the persons directly in charge and other persons directly responsible shall be given sanctions according to law:

(1) failure to pay the small and medium-sized enterprises for goods, construction and services within the prescribed time limit;

(2) delay in inspection and acceptance;

(3) forcing small and medium-sized enterprises to accept non-cash payment methods such as commercial bills of exchange, or using non-cash payment methods such as commercial bills of exchange to extend the term of payment in a disguised manner;

(4) There is no legal, administrative or regulatory basis or contractual agreement requiring the audit results of audit institutions to be used as the basis for settlement;

(5) illegally collecting deposits, refusing to accept guarantees from financial institutions provided by small and medium-sized enterprises, or verifying and settling deposits with small and medium-sized enterprises;

(6) To refuse or delay the payment of small and medium-sized enterprises due to the change of the legal representative or the main person in charge, the implementation of internal payment procedures, or the failure of the contract to wait for the approval of the completion acceptance inspection, the audit of the final accounts, etc.;

(7) failing to disclose the overdue payment information of small and medium-sized enterprises;

(8) intimidation or retaliation against the complainant。

Article 26 In any of the following circumstances, organs and institutions shall be investigated for liability in accordance with laws, administrative regulations and relevant provisions of the State:

(1) Using financial funds to purchase goods, projects and services from small and medium-sized enterprises, failing to comply with the approved budget;

(2) Requiring construction units to fund construction of government-invested projects。

27 Large enterprises in violation of these Regulations, fail to disclose in the annual report of the enterprise overdue payment of small and medium-sized enterprises information or conceal the true situation, fraud, by the market supervision and administration department in accordance with the law。

Where a large state-owned enterprise has no contractual agreement or legal or administrative regulatory basis and requires the audit results of an audit institution to be used as the basis for settlement, the competent department shall order it to make corrections;If the party refuses to make corrections, the persons directly in charge and other persons directly responsible shall be given sanctions according to law。

Article 28 Organizations that use part or all of financial funds for the purchase of goods, projects and services to pay small and medium-sized enterprises shall refer to the relevant provisions of these Regulations on government organs and institutions。

Payments to small and medium-sized enterprises for the procurement of goods, projects and services by the armed forces shall be carried out in accordance with the relevant provisions of the armed forces。

These Regulations shall come into force as of September 1, 2020。