On July 18, the Ministry of Commerce and the Ministry of Finance jointly issued the Administrative Measures for the Risk Treatment Reserve Fund for Foreign Labour Service Cooperation (for Trial Implementation) (the "Measures"), with effect as of August 17, 2014.
The Measures define the scope of the risk treatment reserve fund for foreign labour service cooperation, and set out specific provisions on the payment, use and administration of the reserve fund.
The Measures provide that a foreign labour service cooperation enterprise shall deposit its reserve fund in a designated bank after obtaining its qualifications for the operation of foreign labour service cooperation business and within five working days from the date of its registration with the competent industry and commerce administrative authority. The standard for payment of the reserve fund shall be CNY3 million, which shall be paid in the form of cash or bank guarantee with an equal amount of value. The reserve fund shall be used for its specified purpose only.