（1）Situations of the Charity Receiving Cross-Border Contributions

① Overseas Non-Governmental Organizations Contribute to the Charity

a) Law of the People’s Republic of China on the Administration of Activities of Overseas Non-Governmental Organizations Within the Territory of China Shall Govern Contributions Made by Overseas NGOs to the Charity

According to Article 2 of the Law of the People’s Republic of China on the Administration of Activities of Overseas Non-Governmental Organizations within the Territory of China, an overseas Non-Governmental Organization (‘NGO’) means a non-profit and non-governmental social organization legally established outside of the territory of China, such as a charity, a social group, a think-tank, etc. For overseas NGOs carrying out activities within the territory of China, the Law of the People’s Republic of China on the Administration of Activities of Overseas Non-Governmental Organizations within the Territory of China shall be the governing law.

b) Overseas NGOs May Only Contribute to General Charitable Accounts of The Charity, but Shall Not Open Charitable Accounts 

Article 22 of the Law of the People’s Republic of China on the Administration of Activities of Overseas Non-Governmental Organizations Within the Territory of China stipulates that overseas NGOs that have set up a representative office in China shall manage funds used within the territory of the People’s Republic of China through the bank account recorded in the registration authority by the representative office. Overseas NGOs carrying out temporary activities shall manage funds through the bank account belonging to their Chinese partner, adopt separate book-keeping, and use funds exclusively for the purpose designated for the funds. Without the bank accounts mentioned above, overseas NGOs, Chinese partners and individuals shall not receive or pay any funds used for activities within the territory of the People’s Republic of China in any other ways.

Therefore, in order to comply with the laws and regulations of China, overseas NGOs shall not open charitable accounts in the Charity.

If an overseas NGO intends to contribute to the Charity, it may sign a separate Contribution Agreement (the standard version of the Contribution Agreement disclosed by the Charity does not apply in this case), with the Charity, exclusively contribute charitable assets to general charitable accounts established by the Charity, which will be used in accordance with the DAF-Giving Training Projects Management Rules. The charitable assets in the general charitable accounts shall be managed independently by the Charity.

c) Funds for Activities Conducted by Overseas NGOs Within the Territory of the People’s Republic of China and Fundraising Activities Are Banned for Overseas NGOs 

Article 21 of the Law of the People’s Republic of China on the Administration of Activities of Overseas Non-Governmental Organizations within the Territory of China stipulates that “funds for activities conducted by overseas NGOs within the territory of China include: (1) overseas funds coming from a legitimate source; (2) deposit interests generated in the bank account within the territory of China; (3) other funds legally acquired within the territory of China. Funds for overseas NGOs’ activities within the territory of the People’s Republic of China shall only be acquired and used through the ways mentioned above. Overseas NGOs and their representative offices shall not raise funds within the territory of China.”

d) Apart from in Emergency Situations, Such as Disaster Relief and Rescue Operations, the Charity Shall Report to the Administration Office of Overseas NGOs of the Public Security Department of Guangdong Province for Record-Filing Fifteen Days Before Receiving Contribution from Overseas NGOs

The Guide for the Registration of Representative Offices and Submitting Documents for the Record Temporary Activities of Overseas Nongovernmental Organizations published by the Ministry of Public Security in November 2016 stipulates that, when conducting temporary activities, Chinese partners of overseas NGOs shall handle the examination and approval procedures in accordance with state regulations and report to the Administration Office of Overseas NGOs (the registration administrative authority) of the public security department of the provincial government for record-filing fifteen days before the beginning of temporary activities. In emergency situations, such as disaster relief and rescue operations, where an overseas NGO needs to carry out temporary activities in Mainland China, the timeframe for filing records mentioned in the preceding article shall not apply.

According to the operational practice of many places in China, the act of contribution shall be regarded as conducting temporary activities. Thus, apart from in emergency situations, such as disaster relief and rescue operations, the Charity shall report to the Administration Office of Overseas NGOs of the public security department of Guangdong Province for record-filing fifteen days before receiving contribution from overseas NGOs.

② Contributions Made by Overseas Natural Persons and Overseas Organizations, Excluding Overseas NGOs 

Contributions made by overseas natural persons and overseas organizations, excluding overseas NGOs, to the Charity shall comply with the Law of the People’s Republic of China on the Administration of Activities of Overseas Non-Governmental Organizations Within the Territory of China and other relevant laws and regulations.

Overseas natural persons, overseas organizations, excluding overseas NGOs may open non-general charitable accounts as a qualified donor, contribute to other non-general charitable accounts opened by other charitable account holders of the Charity and general charitable accounts of the Charity.

（2）Targeted Acceptance of Cross-Border Charitable Contributions

Considering the difficulty and complexity of accepting contributions from overseas non-governmental organizations, overseas natural persons, overseas organizations, excluding non-governmental organizations, and the fact that in the early operation stage the Charity shall focus on charitable giving conducted within the border, the Charity is still in the investigation stage as far as cross-border charitable giving is concerned. At this point, it is learning from and researching overseas experiences, practice, and details of cross-border charitable contributions. Therefore, cross-border charitable contributions, both through online and offline systems, are not encouraged. At an appropriate time, the Charity may conduct targeted pilot offline businesses related to cross-border giving with the prior specific approval of the Executive Committee of the Board of Directors, in accordance with current laws and regulations.

（3）Cross-Border Granting Conducted by the Charity

According to Article 1 of the Notice of the State Administration of Foreign Exchange on Issues Concerning the Administration of Foreign Exchange Donated to or by Domestic Institutions and Article 52.1of the Regulation of the People’s Republic of China on Foreign Exchange Administration, the Charity may voluntarily contribute and provide legitimate foreign exchange funds to overseas organizations or overseas individuals.

① The Charity Shall Open the Account for Contributed Foreign Exchange at Designated Foreign Exchange Bank

According to Article 3 Paragraphs 1 and 2 of the Notice of the State Administration of Foreign Exchange on Issues Concerning the Administration of Foreign Exchange Donated to or by Domestic Institutions, the Charity shall manage the income and expenditure of contributed foreign exchange through the account for contributed foreign exchange. The account for contributed foreign exchange shall be included in the foreign exchange account management information system. Therefore, the Charity shall open an account for contributed foreign exchange funds at a designated foreign exchange bank.

② The Charity Shall Submit Relevant Documents to the Designated Foreign Exchange Bank

According to Articles 4 and 8 of the Notice of the State Administration of Foreign Exchange on Issues Concerning the Administration of Foreign Exchange Donated to or by Domestic Institutions, if the Charity handles the income and expenditure of contributed foreign exchange funds, it shall submit the following documents to the designated foreign exchange bank:

a) An application (the domestic institution must state truthfully in the application that the contribution does not violate any relevant prohibitive provisions of the state, and must have gone through all of the required processes, such as examination, approval, filing, etc., according to relevant laws and regulations, and assume legal liabilities arising therefrom);

b) A photocopy of the registration certificate issued by relevant administrative departments; 

c) The notarized contribution agreement indicating the purpose.

Therefore, the Charity must submit the application, photocopy of registration certificate, notarized contribution agreement indicating the purpose, tax record table of external payment concerning projects such as trade in services, among others, (if applicable), and other documents required by the designated foreign exchange bank or the foreign exchange authority, to the designated foreign exchange bank. Following examination and approval by the designated foreign exchange bank, the Charity can start to go through the procedures of receiving and paying contributed foreign exchange funds via the bank account.

③ Charity Encourages Natural Persons, Legal Persons or Unincorporated Organizations in China to Conduct Cross-Border Granting

Under the premise of compliance with relevant laws and regulations, the Charity encourages natural persons, legal persons, or unincorporated organizations in China to conduct cross-border granting cautiously and step by step, by opening charitable accounts in the Charity.