CHAPTER I GENERAL PROVISIONS

      CHAPTER II ADMINISTRATIVE COMPENSATION

      SECTION 1 SCOPE OF COMPENSATION

      SECTION 2 CLAIMANTS TO COMPENSATION AND ORGANS LIABLE FOR COMPENSATION
      SECTION 3 COMPENSATORY PROCEDURE

      CHAPTER III CRIMINAL COMPENSATION

      SECTION 1 SCOPE OF COMPENSATION

      SECTION 2 CLAIMANTS TO COMPENSATION AND ORGANS LIABLE FOR COMPENSATION
      SECTION 3 COMPENSATORY PROCEDURE

      CHAPTER IV FORMS AND ASSESSMENT OF COMPENSATION

      CHAPTER V OTHER PROVISIONS

      CHAPTER VI SUPPLEMENTARY PROVISIONS

      Article 1 This Law is formulated in accordance with the Constitution with
      a view to safeguarding the right of citizens, legal persons and other
      organizations to State compensation according to law, and promoting the
      exercise by State organs of their functions and powers according to law.

      Article 2 Where State organs or State functionaries, in violation of the
      law, abuse their functions and powers infringing upon the lawful rights
      and interests of the citizens, legal persons and other organizations,
      thereby causing damage to them, the victims shall have the right to State
      compensation in accordance with this Law.

      Compensation by the State shall be carried out by the organs liable for
      compensation as stipulated by this Law.

      CHAPTER II ADMINISTRATIVE COMPENSATION

      Article 3 The victim shall have the right to compensation if an
      administrative organ or its functionaries, in exercising their
      administrative functions and powers, commit any of the following acts
      infringing upon the right of the person of a citizen:

      (1) Detaining a citizen in violation of the law or unlawfully taking
      compulsory administrative measures in restraint of his personal freedom;

      (2) Unlawfully taking a citizen into custody or depriving him of his right
      of the person by other unlawful means;

      (3) Using or instigating violence such as beating one up, thereby causing
      bodily injury or death to a citizen;

      (4) Unlawfully using weapons or police restraint implements, thereby
      causing bodily injury or death to a citizen; or

      (5) Other unlawful acts causing bodily injury or death to a citizen.

      Article 4 The victim shall have the right to compensation if an
      administrative organ or its functionaries, in exercising their functions
      and powers, commit any of the following acts infringing upon property
      right:

      (1) Illegally inflicting administrative sanctions such as imposition of
      fines, revocation of certificates and licences, ordering suspension of
      production and business, or confiscation of property;

      (2) Illegally implementing compulsory administrative measures such as
      sealing up, distraining or freezing property;

      (3) Expropriating property or apportioning expenses in violation of the
      provisions of the State; or

      (4) Other illegal acts causing damage to property.

      Article 5 The State shall not be liable for compensation in any of the
      following circumstances:

      (1) Individual acts of a functionary of an administrative organ, which
      have nothing to do with the exercise of his functions and powers;

      (2) Damage arisen from acts done by citizens, legal persons or other
      organizations themselves; or

      (3) Other circumstances provided by law.

      SECTION 2 CLAIMANTS TO COMPENSATION AND ORGANS LIABLE FOR COMPENSATION

      Article 6 Victimized citizens, legal persons or other organizations shall
      have the right to demand compensation.

      In cases of death of a victim, his heirs or other relatives in maintenance
      relationship with him shall have the right to demand compensation.

      In case of termination of a victimized legal person or other organization,
      the legal person or other organization that succeeds to the former's
      rights shall have the right to demand compensation.

      Article 7 Where an administrative organ and its functionaries, in
      exercising their administrative powers, infringe upon the lawful rights
      and interests of a citizen, a legal person or other organizations, thereby
      causing damage to them, the administrative organ shall be the organ liable
      for compensation.

      Where two or more than two administrative organs in jointly exercising
      their administrative functions and powers infringe upon the lawful rights
      and interests of a citizen or a legal person or other organizations,
      thereby causing damage to them, the administrative organs jointly
      exercising their administrative functions and powers shall be the organs
      jointly liable for compensation.

      Where an organization in exercising the administrative powers conferred on
      it by law, rules and regulations infringe upon the lawful rights and
      interests of a citizen or a legal person or other organizations, thereby
      causing damage to them, the empowered organization shall be the
      organization liable for compensation.

      Where an organization or an individual, in exercising the administrative
      powers entrusted to it or him by an administrative organ, infringes upon
      the lawful rights and interests of a citizen or a legal person or other
      organizations, thereby causing damage to them, the administrative organ
      that did the entrustment shall be the organ liable for compensation.

      Where an organ liable for compensation has been abolished, the
      administrative organ that continues to exercise the former's functions and
      powers shall be the organ liable for compensation; if there is no
      administrative organ that continues to exercise the former's functions and
      powers, the administrative organ that abolished the former organ shall be
      the organ liable for compensation.

      Article 8 If reconsideration of a case has been made, the administrative
      organ that first did the tortious act shall be the organ liable for
      compensation; however, if the outcome of the reconsideration aggravates
      the damage, the organ undertaking the reconsideration of the case shall
      carry out its compensatory obligations as regards the increased portion of
      damages.

      Article 9 An organ liable for compensation shall, after confirmation
      according to law of its involvement in any of the circumstances stipulated
      in Articles 3 and 4 of this Law, make the compensation.

      A claimant who demands compensation shall first apply to the organ liable
      for the compensation, or may make demands for it simultaneously when
      applying for administrative reconsideration of the case or when bringing
      an administrative action.

      Article 10 A claimant to compensation may demand compensation from any of
      the organs jointly liable for it, and the organ approached by him for the
      purpose shall first make the compensation.

      Article 11 A claimant to compensation may, in light of the difference in
      nature of the damage suffered, make separate claims simultaneously for
      compensation of the damages.

      Article 12 For the purpose of claiming damages, an application in writing
      shall be made, giving the following particulars:

      (1) Name, sex, age, work unit and address of the victim; if the victim is
      a legal person or other organization, its name and address as well as the
      name and post of its legal representative or of the person chiefly
      responsible for the entity;

      (2) Concrete statement of the claim, factual grounds and reasons; and

      (3) Date, month and year of the application.

      If the claimant has true difficulty in writing an application, he may
      entrust another person with its writing, or may make the application
      orally, which shall be transcribed and put into the record by the organ
      liable for compensation.

      Article 13 The organ liable for compensation shall, within two months from
      the date of receiving the application, pay the compensation in accordance
      with the provisions of Chapter IV of this Law. If payment has not been
      made within this period, or if the claimant is not satisfied with the
      amount of compensation, he may bring a suit in a people's court within
      three months from the date of expiration of the period.

      Article 14 The organ liable for compensation shall, after making the
      compensation, charge its functionaries, entrusted organizations or
      individuals who have been intentional or grossly negligent in the matter,
      to bear part or the whole of the compensatory expenses.

      Those who are responsible for the matter and have been intentional or
      grossly negligent shall be given administrative sanctions by the relevant
      organ in accordance with law; if a crime has been constituted, they shall,
      according to law, be investigated for criminal responsibility.

      CHAPTER III CRIMINAL COMPENSATION

      Article 15 The victim shall have the right to compensation if an organ in
      charge of investigatory, procuratorial, judicial or prison administration
      work, or its functionaries, infringe upon his right of the person in the
      exercise of its functions and powers in any of the following
circumstances:

      (1) Wrong detention of a person without incriminating facts or proof
      substantiating a strong suspicion of the commission of a crime;

      (2) Wrong arrest of a person without incriminating facts;

      (3) Innocence is found in a retrial held in accordance with the procedure
      of trial supervision, but the original sentence has already been executed;

      (4) Extortion of a confession by torture or causing bodily injury or death
      to a citizen by using or instigating the use of violence such as beating
      one up; or

      (5) Causing bodily injury or death to a citizen by the unlawful use of
      weapons or police restraint implements.

      Article 16 The victim shall have the right to compensation if an organ in
      charge of investigatory, procuratorial, judicial or prison administration
      work, or its functionaries, infringe upon property rights in any of the
      following circumstances:

      (1) Unlawfully taking measures such as sealing up, distraining, freezing
      or recovering a property; or

      (2) Innocence is found in a retrial held in accordance with the procedure
      of trial supervision, but the fine or confiscation of property in the
      original sentence has already been executed.

      Article 17 The State shall not be liable for compensation in any of the
      following circumstances:

      (1) The taking into custody or sentencing being due to a citizen's own
      intentionally made false statements or fabricated evidence of guilt;

      (2) The person taken into custody being one not liable for criminal
      responsibility in accordance with Articles 14 and 15 of the Criminal Law;

      (3) The person taken into custody being one who shall not be investigated
      for criminal responsibility in accordance with Article 11 of the Criminal
      Procedure Law;

      (4) Individual acts of functionaries of organs in charge of investigatory,
      procuratorial, judicial or prison administration work of the State, which
      have nothing to do with the exercise of their functions and powers;

      (5) Damage being caused by intentional acts of a citizen such as self-
      wounding and self-mutilation; or

      (6) Other circumstances as stipulated by law.

      SECTION 2 CLAIMANTS TO COMPENSATION AND ORGANS LIABLE FOR COMPENSATION

      Article 18 Claimants to compensation shall be determined in accordance
      with the provisions of Article 6 of this Law.

      Article 19 If an organ in charge of investigatory, procuratorial, judicial
      or prison administration work, or its functionaries, infringe upon the
      rights and interests of a citizen, a legal person, or other organizations,
      in the exercise of its functions and powers, thereby causing damage to the
      victims, that organ shall be the organ liable for compensation.

      If a person is wrongly detained without incriminating facts nor proof
      substantiating a strong suspicion of the commission of a crime, the organ
      deciding on the detention shall be the organ liable for compensation.

      If a person is wrongly arrested without incriminating facts, the organ
      deciding on the arrest shall be the organ liable for compensation.

      If a person is adjudged not guilty in a retrial, the people's court
      passing the originally effective sentence shall be the organ liable for
      compensation. If a person is adjudged not guilty by a court of the second
      instance, the lower court passing the original sentence and the organ
      deciding on the arrest shall be the organs jointly liable for
compensation.

      Article 20 An organ liable for compensation shall pay the compensation if
      its involvement in any of the circumstance stipulated in the provisions of
      Articles 15 and 16 of this Law has been lawfully confirmed.

      If a demand for confirmation of the presence of one of the circumstances
      stipulated in the provisions of Articles 15 and 16 of this Law has been
      made by a claimant to compensation and is not satisfied by the organ to
      which the demand was made, the claimant to compensation shall have the
      right to bring an appeal.

      A claimant to compensation shall first apply to the organ liable for
      compensation in making a demand for it.

      The provisions of Articles 10, 11 and 12 of this Law shall be applicable
      to the compensatory procedure.

      Article 21 An organ liable for compensation shall pay compensation in
      accordance with the provisions of Chapter IV of this Law within two months
      from the date of receiving the application; if payment is not made within
      the period, or if the claimant to compensation is not satisfied with the
      sum of compensation, he may apply for reconsideration to an organ at the
      next higher level within thirty days from the date of expiration of the
      period.

      If the organ liable for compensation is a people's court, the claimant to
      compensation may, in accordance with the provisions of the preceding
      paragraph, apply to the compensation commission of a people's court at the
      next higher level for a decision on compensation.

      Article 22 An organ undertaking the reconsideration shall decide the
      matter within two months from the date of receiving the application.

      A claimant to compensation who refuses to accept the outcome of the
      reconsideration, may, within thirty days from the date of receiving the
      decision, apply for a decision on compensation to the compensation
      commission of the people's court at the same level in the locality where
      the organ that attended to the reconsideration is situated; if the latter
      organ has made no decision within the period prescribed, the claimant to
      compensation may, within thirty days from the expiration of the period,
      apply for a decision to the compensation commission of the people's court
      at the same level in the locality where the organ undertaking the
      reconsideration is situated.

      Article 23 People's courts at or above the intermediate level shall
      establish compensation commission composed of three to seven of their
      judges.

      In making decisions on compensations, compensation commissions shall
      implement the principle of the minority subordinating to the majority.

      Decisions made by a compensation commission are legally effective, and
      must be implemented.

      Article 24 An organ liable for compensation shall, after compensating the
      damage, recover part, or the whole of the compensation expenses from its
      functionaries who are involved in any of the following circumstances:

      (1) Circumstances stated in Items 4 and 5 of Article 15 of this Law; or

      (2) Embezzlement and bribe-taking, malpractice for personal ends, or
      twisting the law in the handling of cases. Persons responsible for their
      involvement in the circumstances as stated in Items 1 and 2 of the
      preceding paragraph shall be given administrative sanctions by the
      relevant organ according to law; if a crime is constituted, criminal
      responsibility shall be investigated according to law.

      CHAPTER IV FORMS AND ASSESSMENT OF COMPENSATION

      Article 25 State compensation shall take the form of payment of damages in
      the main.

      If the property is able to be returned or its original condition is able
      to be restored, the property shall be returned or its original condition
      restored.

      Article 26 If freedom of the person of a citizen is infringed,
      compensatory payment for each day shall be assessed in accordance with the
      State average daily pay of staff and workers in the previous year.

      Article 27 If a citizen's right to life and health is infringed upon,
      compensatory payment shall be assessed in accordance with the following
      provisions:

      (1) In the case of bodily injury, medical expenses as well as compensation
      for loss in income due to missed working time shall be paid. Daily
      compensation for the loss in income shall be assessed in accordance with
      the State average daily pay of staff and workers in the previous year, the
      maximum shall be five times the State average yearly pay of staff and
      workers in the previous year;

      (2) In the case of loss of part or the whole of working capability,
      medical expenses and disability compensation shall be paid, the latter to
      be determined in accordance with the degree of working capability lost.
      Maximum amount of compensation for partial loss of working capability
      shall be ten times the State average yearly pay of staff and workers in
      the previous year, and that for total loss, twenty times, in which case
      living expenses shall too be paid to persons who have no working
      capability and have been supported by the disabled; or

      (3) If death results, compensation for death and funeral expenses shall be
      paid, the total amount shall be twenty times the State average yearly pay
      of staff and workers in the previous year. Living expenses shall too be
      paid to those who have no working capability and have been supported by
      the deceased in his lifetime.

      The standard for payment of living expenses provided in Items 2 and 3 in
      the preceding paragraph shall be handled by using for reference relevant
      provisions for relief of the local departments of civil affairs. If the
      persons supported by the deceased are minors, their living expenses shall
      be paid until they reach the age of 18; as to the others who have no
      working capability, living expenses shall be paid until their death.

      Article 28 Infringement of property right of a citizen, a legal person, or
      other organizations, resulting in damage being caused, shall be dealt with
      in accordance with the following provisions:

      (1) If fines, recovery or confiscation of property have been ordered, or
      monies and chattels have been expropriated and expenses apportioned in
      violation of the provisions of the State, the properties shall be
returned;

      (2) If properties have been sealed up, distrained or frozen, the
      restraints shall be lifted; for properties thus damaged or missing,
      compensation shall be paid in accordance with the provisions of Items 3
      and 4 of this Article;

      (3) If the property to be returned is damaged, it shall be restored to its
      original condition if such restoration can be done; if not, corresponding
      compensation shall be paid in accordance with the extent of damage;

      (4) If the property to be returned is missing, corresponding compensation
      shall be paid;

      (5) If the property has been sold by auction, the proceeds of the auction
      shall be returned;

      (6) If the certificate and licence have been revoked and suspension of
      production and business has been ordered, compensation shall be paid for
      necessary overhead expenses for the period of such suspension; and

      (7) If other damage is done to property rights, compensation shall be paid
      for the direct losses.

      Article 29 Compensation expenses shall be entered in the financial budget
      at various levels, specific measures therefor are to be provided by the
      State Council.

      Article 30 If the presence of any one of the circumstances stipulated in
      Items 1 and 2 of Article 3 and Items 1, 2 and 3 of Article 15 of this Law
      has been lawfully confirmed and found injurious to the victim's reputation
      and honour, the organ liable for compensation shall, within the scope of
      influence of the tortious act, eliminate the evil effects for the victim,
      rehabilitate his reputation, and extend an apology.

      Article 31 If a people's court, in violation of the law, adopts in civil
      or administrative proceedings compulsory measures or preservative measures
      in impairment of the proceedings, or wrongly executes a judgment or a
      ruling or other effective legal documents, thereby resulting in damage
      being done, the criminal compensation procedures of this Law shall be
      applicable to the procedure for making claims for compensation by the
      claimant.

      Article 32 The limitation of action for claims for State compensation
      shall be two years, to be counted from the day the exercise of the
      functions and powers by a State organ and its functionaries is lawfully
      confirmed to be in violation of law, but the period of detention of the
      victim shall not be counted.

      The limitation of action for claims for State compensation shall be
      suspended if during its last six months, the claimant is unable to
      exercise his rights due to force majeure or other obstacles. The
      limitation shall resume from the day the grounds for suspension are
      eliminated.

      Article 33 If a foreigner, a foreign enterprise, or a foreign organization
      within the territory of the People's Republic of China demands
      compensation to be made by the People's Republic of China, this Law shall
      apply.

      If a State to which a foreigner, a foreign enterprise, or a foreign
      organization belongs gives no protection to or limits the right of a
      citizen, a legal person, or other organizations of the People's Republic
      of China to claim compensation by that State, the People's Republic of
      China shall implement the principle of reciprocity with the State to which
      the foreigner, the foreign enterprise, or the foreign organization
belongs.

      CHAPTER VI SUPPLEMENTARY PROVISIONS

      Article 34 No organs liable for compensation or undertaking the
      reconsideration of a case, or the people's courts may collect any expenses
      from a claimant to State compensation.

      No tax shall be levied as regards the compensation a claimant has
obtained.