Article 1    These Provisions are formulated according to the Audit Law of the People's Republic of China and the Administrative Proceedings Law of  the People's Republic of China for the purpose of protecting the exercise of power and duties by the audit institutions and promoting effective solution of administrative disputes related to audit.

Article 2     The term "appearance as respondent before the court in administrative proceedings related to audit" mentioned herein refers to participation of audit institutions as respondent in audit administrative proceedings.

Article 3    While appearing as respondent before the court in administrative proceedings related to audit, audit institutions shall be subject to the supervision of the people's courts and shall carry out their activities on the basis of facts and strictly in accordance with the law.

Article 4    Audit institutions shall appear before the court in administrative proceedings related to audit by differentiating the following situations:
(1) Where the reviewing body makes the decision of maintaining the original specific administrative acts of audit, the audit institution metering out the original acts shall make the above-mentioned appearance;
(2) Where the reviewing body makes the decision of altering the original specific administrative acts of audit, the reviewing body shall make the above-mentioned appearance.

Article 5     Legal departments within audit institutions shall be the legal representatives of their respective institutions for appearance as respondent before the court in administrative proceedings related to audit (hereinafter referred to as the legal representatives).  Those audit institutions without the establishment of such departments shall determine their own legal representatives or appoint professional agents ad litem.

Article 6   The legal representatives shall perform the following duties:
(1) To organize and handle specific cases of administrative proceedings related to audit which require appearance of their respective audit institutions as respondent before the court;
(2) To instruct appearance of audit institutions at lower levels as respondent before the court in administrative proceedings related to audit;
(3) To understand and study universal problems existing in appearance as respondent before the court in administrative proceedings related to audit and put forward well-directed recommendations to leaders of their respective audit institutions about the improvement of law implementation in the administrative aspects of audit.

Article 7    After the audit institution receives the copied version of the bill of complaint, its legal representative shall appoint the agent ad litem according to relevant authorization from the audit institution.

Article 8    Staff members of the audit institutions may be appointed agent ad litem or solicitors may be engaged to act as agent ad litem.  

Article 9     The legal representative of the audit institution shall sign the power of attorney with the agent ad litem, which shall clarify the items, mandate and duration of agency for the agent ad litem.

Article 10   The audit institution and the reviewing body shall transfer to the agent ad litem materials related to the metering out of specific administrative acts of audit and shall cooperate with the agent ad litem for effective preparation before the actual appearance takes place.

Article 11   The agent ad litem shall draft the written response according to specific situations of the case.

The written response shall be characterized by clear facts, sufficient reasons, explicit opinions, distinctive objectives and accurate legal basis.

Article 12    The legal representative shall, within 10 days of receiving the copied version of the bill of complaint, submit the following materials to the people's court:
(1) Written response;
(2) Relevant materials related to the metering out of specific administrative acts of audit;
(3) Identification of the legal representative;
(4) Power of attorney;
(5) Other materials required by the people's court.

Article 13    The agent ad litem shall draft his statement of attorney prior to the holding of court hearings.

The statement of attorney shall be characterized by objective statement of facts, correct application of laws and regulations, sufficient reasoning and legitimate and reasonable requirements.

Article 14    The legal representative and the agent ad litem shall make their appearance before the court according to the time specified in the notifications delivered by the people's court and shall obey court instructions and observe court disciplines.

Article 15    During the court hearing, the agent ad litem shall take notes of the hearing.

Article 16    The agent ad litem shall safeguard state secrets during the full proceeding of the case.

Article 17    Where the audit institution disagrees with the judgment of first instance, appeal to the people's court at the next higher level shall be made within 15 days of the arrival of the judgment at the audit institution. Where the audit institution disagrees with the order of first instance, appeal to the people's court at the next higher level shall be made within 15 days of the arrival of the order at the audit institution.

Article 18    The audit institution shall strictly execute judgments and orders made by the people's court that have already come into effect.

Article 19    Where the audited body fails to execute judgments and orders made by the people's court that have already come into effect, the audit institution may impose sanctions according to the Provisions of Audit Institutions on Audit Sanctions and Penalties or may apply to the people's court for enforcement.

Article 20    Execution of specific administrative acts of audit shall not be suspended during the period of administrative proceedings.  However, execution of such acts may be suspended under one of the following circumstances:
(1) Where suspension is deemed necessary by the audit institution;
(2) Where the people's court orders such suspension of execution at the request of the audited body;
(3) Where suspension of execution is required by relevant laws and regulations.

Article 21    At the closing of the case, the legal representative shall produce a closing statement, which shall clarify the following major items:
(1) Facts and causes related to the dispute between the audit institution and the audited body;
(2) Major court hearing(s);
(3) Judgment or order made by the court;
(4) Other items requiring explanation.

Article 22    Audit institutions at lower levels shall submit materials about their appearance as respondent in administrative proceedings related to audit to audit institution at higher levels for filing within one month of the closing of such cases.

Local audit institutions shall, in the middle of and at the end of the fiscal year, report half-yearly and annual administrative proceedings related to audit within their respective localities to audit institutions at higher levels.

Article 23    The authority to interpret these Provisions rests with the CNAO.

Article 24    These Provisions shall come into effect as of January 1, 1997, while the Interim Provisions of Audit Institutions on Handling Administrative Proceedings shall be abolished as of the same date.