The Ministry of Finance ("MOF") and the Ministry of Science and Technology ("MOST") have recently issued the revised Administrative Measures for Funds for Local Scientific and Technological Development under the Guidance of the Central Government (the "Measures"), with effect from January 1, 2020.
The Measures clarify that the funds may be used to finance basic research for free inquiry purpose, construction of science and technology innovation bases, transfer and transformation of scientific and technological achievements, and buildup of the regional innovation system, adding that such funds cannot be used to make payments for various fines, donation, sponsorship, investment, or debt repayment. Meanwhile, the Measures require that entities using such funds shall manage and use them in strict accordance with accounting laws and regulations of the State and other relevant provisions, exercise the whole-process performance management, and voluntarily accept oversight and performance assessment. Furthermore, the Measures provide that in case entities and individuals, using the funds, commit any unlawful acts in the course of fund use, they will be held liable in accordance with the Budget Law of the People's Republic of China and other relevant provisions of the State, adding that the subjects held liable for a grave violation of laws or discipline or for criminal offenses, will be added into the record of seriously dishonest acts in scientific research.