中华人民共和国信托法 Trust Law of the Peoples Republic of China

and expenses relating to, his trust property, and the right to request the trustee to give explanations in this regard.

　　The settler shall have the right to check, transcribe or duplicate the trust accounts related to his trust property and other documents drawn up in the course of dealing with trust business.

　　Article 21 If, due to special reasons unexpected at the time the trust is created, the methods of administrating the trust property are not favorable to the realization of trust purposes or do not conform to the interests of the beneficiary, the beneficiary, the settler shall have the right to ask the trustee to modify such methods.

　　Article 22 Where the trustee disposes of the trust property in breach of purposes of the trust, or causes losses to the trust property due to his departure from his administrative duties or improper handling of trust business, the settler shall have the right to apply to the People's Count for annulling such disposition and the right to ask the trustee to restore the property to its former state or make compensation. Where a transferee of the said trust property accepts the property while knowing the violation of the purposes of the trust, he shall return the property or make compensation.

　　Where the settler does not exercise the right of application prescribed in the preceding paragraph within one year beginning from the date he comes to know or should have known the reason for annulling the disposition, such right shall cease to exist.

　　Article 23 Where the trustee disposes of the trust property against the purposes of the trust or commits gross negligence in administering, using or disposing of the trust property, the settler shall have the right to dismiss the trustee according to the provisions in the trust documents or apply to the People's Count for dismissing him.

　　Section 2

　　The Trustee

　　Article 24 The trustee shall be a natural person or legal person who has full capability for civil conduct.

　　Where there are other provisions governing qualifications of a trustee laid down in laws or administrative regulations, those provisions shall prevail.

　　Article 25 The trus

tee shall abide by the provisions in the trust documents and handle trust business for the best interests of the beneficiary.

　　In administering the trust property, the trustee shall be careful in performing his duties and fulfill his obligations with honesty, good faith, prudence and efficiency.

　　Article 26 Except obtaining remuneration according to the provisions of this Law, the trustee may not seek interests for himself by using the trust property.

　　Where the trustee, in violation of the provisions of the preceding paragraph, seeks interests for himself by using the trust property, the interests gained therefrom shall be integrated into the trust property.

　　Article 27 The trustee may not convert the trust property into his own property. Where the trustee converts the trust property into his own property, he shall restore the trust property into its former state; where losses are caused to the trust property, he shall bear the responsibility to pay compensation.

　　Article 28 The trustee may not conduct inter transaction between his own property and trustee assets or between the trust assets of different settlers, unless it is otherwise stipulate in the trust documents or is consented by the settlers or beneficiary and the inter transaction is conducted at fair market price.

　　Where the trustee, in violation of the provisions in the preceding paragraph, causes losses to the trust property, he shall bear the responsibility to pay compensation.

　　Article 29 The trustee shall administer the trust property separately from his own property and keep separate accounting books, and he shall do the same with regard to the trust property of different settlers.

　　Article 30 The trustee shall handle trust business himself, but may entrust another person to handle such affairs on his behalf where the trust documents provide otherwise or he has to do so for reasons beyond his control.

　　Where the trustee, in accordance with law, entrusts another person to handle trust business on his behalf, he shall bear the responsibility for the acts committed by that person in handling such affairs.

　　Article 31 Where there are two or more trustees in the same trust, they are co-trustees.

　　The co-trustees shall handle trust business jointly, but where the trust documents stipulate that the trustees may separately handle certain specified affairs, such stipulations shall prevail.

　　If the co-trustees disagree with each other when handing trust business jointly, the matter shall be dealt with in accordance with the provisions in the trust documents; where there are no provision in this regard in the documents, the settler, beneficiary or the party interested shall make a decision.

　　Article 32 The co-trustees who incur debts to a third party in the course of handling trust business shall bear joint and several responsibilities for clearing the debts. The intention expressed by the third party to any one of the co-trustees shall be equally effective to the other co-trustees.

　　Where one of the co-trustees disposes of the trust property against the purposes of the trust or causes losses to the trust property due to his departure from his administrative duties or his improper handling of trust business, the other co-trustees shall bear joint and several responsibility for compensation.

　　Article 33 The trustee shall keep complete records of the trust business handled.

　　The trustee shall, at regular intervals every year, report to the settler and beneficiary on the administration and disposition of the trust property and the income and expenses relating to the property.

　　The trustee shall, in accordance with law, have the obligation to keep confidential minutes relating to the settler, the beneficiary and trust business handled.

　　Article 34 The trustee shall have the obligation to pay the beneficiary benefits

from the trust with the limits of the trust property.

　　Article 35 The trustee shall have the right to obtain remuneration as agreed in the trust documents. Where there is no such agreement in the documents, a supplementary agreement may be made with the consent given by the parties concerned after consultation; in the absence of a prior or supplementary agreement, no remuneration may be asked for.

　　The agreed remuneration may, with the consent given by the parties concerned after consultation, be increased or decreased.

　　Article 36 Where the trustee disposes of the property against the purposes of the trust or causes losses to the trust property due to his departure from his administrative duties or his improper handling of trust business, he may not ask to be paid before he restores the property to its former state or makes compensation.

　　Article 37 The charges paid and the debts owed to a third party by the trustee in the course of handling trust business shall be borne by the trust property. Where the trustee effects such payment in advance with his own property, he shall have the priority right to be paid with the trust property.

　　The debts owed to a third party or the losses suffered by himself as a result of his departure from his administrative duties or his improper handling of trust business shall be borne by him with his own property.

　　Article 38 After the creation of a trust, with the consent of the settler and beneficiary, the trustee may resign. Where there are other provisions in this Law governing the resignation of the trustee of a public welfare trust, those provisions shall prevail.

　　Where the trustee resigns, he shall, before another trustee is appointed, continue to perform the duties of administering the trust business.

　　Article 39 Under one of the following circumstances, the trustee's appointment shall be terminated：

　　（1）he dies or is declared dead according to law;

　　（2）he is declared to be a person with no or restricted capability for civil conduct;

　　（3）his trusteeship is removed or he is declared bankrupt;

　　（4）his trusteeship is dissolved in accordance with law or he forfeits his legal qualifications;

　　（5）he resigns or is dismissed; or

　　（6）other circumstances stipulated in laws or administrative regulations.

　　Where the trustee's appointment is terminated, his successor, or the supervisor of heritage, guardian or liquidator shall keep the trust property, and help the new trustee to take over the trust business.

　　Article 40 Where the trustee's appointment is terminated, a new trustee shall be appointed according to the provisions in the trust documents; where there are no such provisions in the documents, the settler shall make the appointment; where the settler does not make the appointment or is incapable of doing so, the beneficiary shall designate one; where the beneficiary is a person with no or restricted capacity for civil conduct, his guardian shall, in accordance with law, make the appointment on his behalf.

　　The new trustee shall take up the rights and obligations of the former trustee in the handing of trust business.

　　Article 41 Where the trustee is found to be under one of the circumstances listed in subparagraphs 3 to 6 of the first paragraph Article 39 of this law and his appointment is thus terminated, he shall produce a report on the trust business handled and go through the formalities for the handing over of the trust property and affairs to the

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