（Order No. 2 [2005] of the Ministry of Commerce, the Ministry of Public Security, the State Administration for Industry and Commerce and the State Administration of Taxation, August 29, 2005）
Chapter I General Provisions
Article 1 The present Measures are formulated according to the relevant laws and administrative regulations of the state for the purpose of intensifying the administration of the circulation of second-hand automobiles, regulating the business operations of second-hand automobiles, guaranteeing the legitimate interests and rights of both parties to transactions of second-hand automobiles and promoting the sound development of the circulation of second-hand automobiles.
Article 2 The present Measures shall apply to the business operations of second-hand automobiles as well as the activities involving second-hand automobiles within the Chinese territory,
The term "second-hand automobiles" as mentioned in the present Measures refers to the automobiles that are traded and whose ownership is transferred in the duration from the completion of the registration formalities to when the state compulsory discarding standards are satisfied, including three-wheeled automobiles, low-speed motor trucks （former agricultural transport vehicles, hereinafter the same）, trailers and motorcycles.
Article 3 The term "the second-hand automobile market" refers to a place that is established according to law and provides centralized transactions of second-hand automobiles as well as the relevant services for both parties to a transaction.
Article 4 The term "business operators of second-hand automobiles" refers to the enterprises that have gone through the registration formalities according to law in the administrative department of industry and commerce and undertake the retail, auction, brokerage, authentication and evaluation of second-hand automobiles.
Article 5 The term "business operations of second-hand automobiles" refers to such activities as retail, auction, brokerage, authentication and evaluation of second-hand automobiles.
（1） The term "retail of second-hand automobiles" refers to the business activity whereby a retail enterprise of second-hand automobiles purchases and sells second-hand automobiles;
（2） The term "auction of second-hand automobiles" refers to the business operation whereby an auction enterprise of second-hand automobiles transfers a second-hand automobile to a bidder that offers the highest price through public bidding;
（3） The term "brokerage of second-hand automobiles" refers to the business operation whereby a brokerage institution of second-hand automobiles engages in such business operations as intermediary, agency, and brokerage to promote other persons transaction of second-hand automobiles for the purpose of collecting commissions; and
（4） The term "authentication and evaluation of second-hand automobiles" refers to the business operation whereby an authentication and evaluation organization of second-hand automobiles carries out authentication and evaluation on the technical situation of a second-hand automobile as well as the value thereof.
Article 6 The term "direct transaction of second-hand automobiles" refers to a transaction whereby the owner of a second-hand automobile directly sells his automobile to a buyer without the assistance of any retail enterprise, auction enterprise or brokerage institution. A direct transaction of second-hand automobiles shall be carried out in the second-hand automobile market.
Article 7 The administrative department of commerce, the administrative department of industry and commerce and the taxation department of the State Council shall take charge of the relevant supervision and administration work concerning the circulation of second-hand automobiles according to their respective powers and functions.
The provincial-level administrative department of commerce （hereinafter referred to as the administrative department of commerce at the provincial level）, the administrative department of industry and commerce and the taxation department of the provinces, autonomous regions and municipalities directly under the Central Government and the city under separate state planning shall take charge of the relevant supervision and administration work concerning the circulation of second-hand automobiles according their respective powers and functions within their jurisdiction.
Chapter II Requirements of and Procedures for Establishment
Article 8 A business operator in the second-hand automobile market, a retail enterprise and brokerage institution of second-hand automobiles shall have the qualification of a enterprise legal-person and shall go to the administrative department of industry and commerce to handle the formalities of registration according to law.
Article 9 An authentication and evaluation organization of second-hand automobiles shall meet the following requirements:
（1） Being an independent intermediary organization;
（2） Having a fixed business place and the necessary facilities to undertake its business operations;
（3） Having 3 or more professionals engaged in the authentication and evaluation of second-hand automobiles （including the appraisers of old motor vehicles who have acquired a professional qualification certificate of the state before the implementation of the present Measures）; and
（4） Having sound rules and regulations.
Article 10 The establishment of an authentication and evaluation organization of second-hand automobiles shall be handled according to the following procedures:
（1） The applicant shall file a written application with the administrative department of commerce at the provincial level where the authentication and evaluation organization of second-hand automobiles is to be located and submit the relevant materials as prescribed in Article 9 of the present Measures;
（2） The administrative department of commerce at the provincial level shall, within 20 workdays as of receiving all the application materials, decide whether or not to grant an approval and, in the case of approval, issue the Approval Certificate of Authentication and Evaluation Organizations of Second-hand Automobiles; in the case of disapproval, give an explanation; and
（3） The relevant applicant shall go to the administrative department of industry and commerce to handle the formalities of registration upon the strength of the Approval Certificate of Authentication and Evaluation Organizations of Second-hand Automobiles.
Article 11 An applicant for establishing a foreign-funded second-hand automobile market, retail enterprise, brokerage institution, or authentication and evaluation organization shall submit to the administrative department of commerce at the provincial level the relevant materials that comply with the provisions of Articles 8 and 9 of the present Measures, the Measures for the Administration of Foreign Investment in the Commercial Field, and other relevant laws on foreign investment. The administrative department of commerce at the provincial level shall, after the preliminary examination, report them to the administrative department of commerce of the State Council within 1 month as of receiving all the application materials. The Chinese party to a joint venture that is an enterprise group under separate state planning may directly report the application materials to the administrative department of commerce of the State Council. The administrative department of commerce of the State Council shall, within 3 months as of receiving all the application materials, decide whether or not to grant an approval in collaboration with the administrative department of industry and commerce of the State Council. In the case of approval, it shall issue an Approval Certificate of Foreign-funded Enterprises or issue a new one; in the case of disapproval, it shall give an explanation.
The relevant applicant shall go to the administrative department of industry and commerce to handle the formalities of registration upon the strength of the Approval Certificate of Foreign-funded Enterprises.
Article 12 The establishment of an auction enterprise of second-hand automobiles （including a foreign-funded auction enterprise of second-hand automobiles） shall comply with the relevant provisions of the Auction Law of the Peoples Republic of China and the Measures for the Administration of Auction, and shall be handled according to the procedures as prescribed by the Measures for the Administration of Auction.
Article 13 The merger and acquisition of any second-hand automobile market or operational subject by any foreign investor or the expansion of business scope of an already established foreign-funded enterprise to engage in second-hand automobiles shall be handled according to the procedures as prescribed by Articles 11 and 12.
Chapter III Behavioral Standards
Article 14 An operator of second-hand automobile market as well as an operational subject of second-hand automobiles shall carry out its business operations and pay taxes according to law, observe the commercial ethics and shall be subject to the supervision and examination as carried out according to law.
Article 15 A seller of second-hand automobiles shall have the ownership or right to dispose of the automobile. An operator of second-hand automobile market as well as an operational subject of second-hand automobiles shall affirm the identity certification of the relevant seller, number plate of the vehicle, the Registration Certificate of Motor Vehicles, the Operational License of Motor Vehicles, the effective mark of passing the security technical examination, the insurance policy of the vehicle, and the payment certificate of relevant taxes and fees.
A state organ or state-owned enterprise or public institution shall, where selling or entrusting an auction of any vehicle, hold the asset treatment certification as produced by this entity or its superior entity.
Article 16 Anyone that sells or auctions any vehicle of which he has no ownership or right to disposal shall be subject to relevant legal liabilities.
Article 17 A seller of second-hand automobiles shall provide the real situation of and authentic information about the use, repair, accident, and examination, whether the registration of mortgage has been handled, whether the taxes and fees have been paid as well as the time to be discarded. Where a buyer fails to go through the formalities for the registration of transfer due to any concealing or fraud as committed by a seller, the relevant seller shall accept the unconditional return of the vehicle and shall refund the vehicle purchase price, etc……
Article 18 A retail enterprise of second-hand automobiles shall, when selling any second-hand automobile, provide the quality guaranty as well as the post-sale promise, which shall be clearly indicated in its business place.
Article 19 A contract shall be concluded for a second-hand automobile transaction. The model contract shall be formulated by the administrative department of industry and commerce of the State Council.
Article 20 An owner of a second-hand automobile who entrusts any other person to handle the sale of his vehicle shall conclude a power of attorney with the entrusted person.
Article 21 Where anyone entrusts a brokerage institution of second-hand automobiles to purchase any second-hand automobile, both parties shall meet the following requirements for the entrusted purchase:
（1） The entrusting person shall provide a legal identity certification to the brokerage institution of second-hand automobiles;
（2） The brokerage institution of second-hand automobiles shall choose the vehicle according to the requirements of the entrusting person and shall inform him of the market situation;
（3） Where a brokerage institution of second-hand automobiles accepts the entrustment for purchase, both parties shall conclude a contract; and
（4） Where a brokerage institution of second-hand automobiles handles the authentication and evaluation of vehicles on behalf of and according to the requirements of the entrusting person, the relevant expenses for authentication and evaluation that incurred therefrom shall be borne by the entrusting person.
Article 22 Where a transaction of any second-hand automobile is concluded, the seller shall deliver to the buyer the vehicle, plate number and the legal certification of the vehicle as well as a warrant in a timely manner. The legal certification and warrant of a vehicle shall mainly include:
（1） A Registration Certificate of Motor Vehicles;
（2） An Operational Certificate of Motor Vehicles;
（3） The effective mark of passing the security technical examination;
（4） The proof of payment of vehicle purchase tax;
（5） The payment certificate of expenses for highway maintenance;
（6） The payment certificate of vehicle and vessel usage taxes; and
（7） The insurance policy of the vehicle.
Article 23 The following vehicles are prohibited from any retail, sale and purchase, auction or brokerage:
（1） A vehicle that has been discarded or has reached the state standard of compulsory discarding;
（2） A vehicle under the supervision of the customs that is being mortgaged or for which the seller fails to obtain the approval of the customs for transaction;
（3） A vehicle that is sealed up or being mortgaged by the peoples court, the peoples procuratorate and the administrative department of law enforcement;
（4） A vehicle that is obtained by such illegal criminal means as larceny, robbery and fraud;
（5） A vehicle whose engine number, vehicle identification number or frame number fails to comply with the numbers registered, or has any trace of alteration;
（6） A vehicle that comes from any smuggle or is illegally assembled;
（7） A vehicle for which the seller fails to obtain the certificate or warrant as prescribed in Article 22;
（8） A vehicle that is registered at the administrative department of public security beyond the relevant administrative division; or
（9） A vehicle that is prohibited by any law or administrative regulation of the state from operation.
Where an operator of the second-hand automobile market or a business operator of second-hand automobiles finds any of the circumstances as prescribe in item （4）, （5） or （6）, he shall report it to the law enforcement departments, such as the organ of public security and the administrative department of industry and commerce.
An operator of the second-hand automobile market or an operational subject of second-hand automobiles shall bear joint compensatory liabilities and any other legal liabilities for any vehicle that is unlawfully traded.
Article 24 Where a brokerage enterprise of second-hand automobiles or an auction enterprise of second-hand automobiles sells or auctions any second-hand automobile, it shall produce an invoice as uniformly printed under the supervision of the tax authority to the buyer.
For a direct transaction of any second-hand automobile or a transaction of any second-hand automobile made through a brokerage of second-hand automobiles, the relevant operator of the second-hand automobile market shall produce an invoice as uniformly printed under the supervision of the tax authority to the buyer according to the provisions.
Article 25 Where a transaction of any second-hand automobile is concluded, the present owner of the vehicle shall handle the formalities for the registration of transfer upon the strength of the invoice as uniformly printed under the supervision of the tax authority according to the relevant laws and regulations.
Article 26 An operator of the second-hand automobile market shall provide a fixed place as well as facilities for the operational subjects of second-hand automobiles, and shall provide the conditions of handling such formalities for authentication and evaluation, registration of transfer, insurance and tax filing for its clients. A retail enterprise or a brokerage institution of second-hand automobiles shall, according to the requirements of its clients, handle such formalities as authentication and evaluation, registration of transfer, insurance and tax filing on their behalf.
Article 27 The principles of free will of both parties to a transaction shall be upheld in the authentication and evaluation of a second-hand automobile, which shall not be carried out in a compulsory manner. Any second-hand automobile that belongs to the state assets shall be subject to authentication and evaluation according to the relevant provisions of the state.
Article 28 An authentication and evaluation organization of second-hand automobiles shall, according to the principles of "being objective, authentic, impartial and open", carry out the business operations of authentication and evaluation of second-hand automobiles according to the laws and regulations of the state, and produce the relevant reports on the authentication and evaluation of vehicles; and shall bear the legal liabilities for such authentication contents as the technical situation of vehicles in the report on authentication and evaluation, including whether it is a vehicle that is involved in any legal case or accident.
Article 29 An authentication and evaluation organization of second-hand automobiles and the personnel thereof may engage in such authentication operations as the authentication of a vehicle that is involved in any legal case or accident.
Article 30 An operator of the second-hand automobile market as well as operational subjects of second-hand automobiles shall establish a complete archival filing for the purchase and sale, auction, brokerage as well as authentication and evaluation of second-hand automobile transactions.
Article 31 The establishment of the second-hand automobile market or any store of a retail enterprise of second-hand automobiles shall comply with the relevant provisions on the development of the city where it is located as well as on the urban commercial development.
Chapter IV Supervision and Administration
Article 32 The principles of breaking monopoly, encouraging competition, promoting development and being fair, impartial and open shall be upheld in the supervision and administration of second-hand automobiles.
Article 33 An archival filing system of the operators of second-hand automobile markets and operational subjects of second-hand automobiles shall be established. The operators of second-hand automobile markets and operational subjects of second-hand automobiles that have handled the registration in the administrative department of industry and commerce according to law and obtained the business license shall go to the administrative department of commerce at the provincial level for archival filing within 2 months as of obtaining their business license. The administrative department of commerce at the provincial level shall report the information on the archival filing of the operators of second-hand automobile markets as well as operational subjects of second-hand automobiles to the administrative department of commerce of the State Council on a periodical base.
Article 34 A reporting and publicity system of information on the circulation of second-hand automobiles shall be established and improved. An operator of the second-hand automobile market and an operational subject of second-hand automobiles shall report such information as volume and value of trade to the administrative department of commerce at the provincial level through the local administrative department of commerce. The administrative department of commerce at the provincial level shall summarize the aforesaid information and report it to the administrative department of commerce of the State Council. The administrative department of commerce of the State Council shall publicize the information on the circulation of second-hand automobiles to the society.
Article 35 The administrative department of commerce and the administrative department of industry and commerce shall take effective measures within their respective powers and functions, intensify the supervision and administration of the operators of the second-hand automobile market as well as the operational subjects thereof, investigate into and punish irregularities, maintain the market order, and safeguard the legitimate rights and interests of consumers.
Article 36 The administrative department of industry and commerce of the State Council shall, in collaboration with the administrative department of commerce, establish a credit archives of the operators of second-hand automobile markets and operational subjects of second-hand automobiles and publicize the name list of rule-breaking enterprises on a periodical base.
Chapter V Supplementary Provisions
Article 37 The present Measures shall come into force as of October 1, 2005. The former Circular of the General Office of the Ministry of Commerce on Regulating the Administration of the Authentication and Evaluation of Used Motor Vehicles （No. 70 [2004] of the Ministry of Commerce）, Circular on Intensifying the Administration of the Used Motor Vehicle Market （No. 1281 [2001] of the Ministry of Commerce） and Measures for the Administration of Used Motor Vehicle Transactions （No. 33 [1998] of the Ministry of Commerce） as well as all kinds of documents as promulgated on the base thereof shall be simultaneously abolished.