China’s Legislature to Adopt Law on Asset Appraisal
The top legislature in China has adopted a law on asset appraisal a first such law that governs the country’s asset appraisal industry since it started three decades ago. The law was drafted in 2006, and adopted after a fourth reading during the bi-monthly session of the National People’s Congress Standing Committee and will take effect in December 1, 2016.
The country had an administrative regulation on the state owned asset evaluation that was promulgated by the State Council in 1991. The new law will allow certified appraisers who have passed national exams, an those who have expertise and hands on experience in asset evaluation and to practice asset appraisal, foreign nationals are not allowed to be certified appraisers in China by sitting the exams, although they can provide asset appraisal services. The law also do not prohibit any foreign institutions to practice asset appraisal in China, stressing that authorities must conduct necessary reviews when appraising agencies are established by those foreign nationals and institutions. Foreign institutions also provide appraisal services in the fields that are pertinent to the economic security of the country.
Once the adoption of the law, involved agencies in the industry need to formulate and improve relevant measures. Practitioners are required to provide appraisal services and sign appraisal reports that is in accordance to the law, wherein those signing false reports are subjected to a lifetime ban. The law also stated that appraisal agencies should be supervise and to take responsibility for the professional conduct of the practitioners. And for state owned assets or public interests, an appraisal is legally required then an appraisal agency must assign two certified appraisers to the job ans sign the appraisal reports.
The new law also stipulates that an appraiser qualification exam must be organized by the national appraisal industry association. Industry associations must establish mechanisms that will be used for communications, information sharing and coordination an common codes of conduct to boost the sound and orderly development of the appraisal industry which is also regulated by city level authorities.