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Country Advice Refugee Review Tribunal AUSTRALIA RRT RESEARCH RESPONSE Research Response Number: CHN33347 Country: China Date: 16 May 2008 Keywords: China – CHN33347 – Establishing a Business– Identity Cards – Residence Cards – Hukou – Shenzhen This response was prepared by the Research & Information Services Section of the Refugee Review Tribunal (RRT) after researching publicly accessible information currently available to the RRT within time constraints. This response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. This research response may not, under any circumstance, be cited in a decision or any other document. Anyone wishing to use this information may only cite the primary source material contained herein. Questions 1. Please advise whether it is possible to set up a company using another person’s identity and personal information in the PRC? 2. Please advise whether it is possible to use another person’s identification card to find a place to live in the PRC? Would a person be able to exist, operate a business and pay taxes without using his identity card? RESPONSE 1. Please advise whether it is possible to set up a company using another person’s identity and personal information in the PRC? No specific information or examples were located in the sources consulted regarding persons setting up companies in China using another person‘s identity or personal information. A review of source information relevant to the question of the ability of a person to establish a business in China using false or fraudulently obtained identity documentation is presented below under the following sub-headings: Procedures and Documentation for Establishing a Business in China, and Fake Identity Documents in China. Procedures and Documentation for Establishing a Business in China Detailed information was located on the Doing Business website (http://www.doingbusiness.org/) regarding the general steps required to start a limited liability company in China. These steps include opening bank accounts, obtaining a business license, obtaining permission from police to create a business seal, and registering with various local government departments, including local tax and statistics bureaus. With regard to the process of obtaining a business license, the Doing Business website indicates that identity cards are included in the documentation required: To obtain registration certification, the company must file a completed application form along with the following documents: – Notice of approval of company name. – Lease or other proof of company office. – Capital verification certificate or appraisal report. – Articles of association, executed by each shareholder. – Representation authorization. – Identity cards of shareholders and identification documents of officers. – Appointment documents and identification documents (certifying name and address) of the directors, supervisors, and officers. – Appointment documents and identification documents of the company‘s legal representative – If the initial contribution is in nonmonetary assets, the document certifying transfer of the property title of such assets. – Other documents as required by the authorities. …Documentation requirements for company registration were standardized. The Registry is now required to publicly display them (‗Starting a Business in China‘ 2008, Doing Business website http://www.doingbusiness.org/ExploreTopics/StartingBusiness/Details.aspx?economyid=42 – Accessed 16 May 2008 – Attachment 1). With specific regard to Shenzhen, information was located on the website of the Shenzhen Municipal Office of Legislative Affairs regarding the procedures for setting up a company in the Shenzhen Special Economic Zone. A copy of business legislation for Shenzhen Economic Zone, enacted on 30 June 1999, stipulates the documentation which is required as part of the application process to establish an unlimited liability business, including identification papers, and the names and addresses of merchants and partners: Chapter III Registration of Merchants …Article 11 The registration items of unlimited liability merchants shall include: names, places (or addresses), persons in charge, types of enterprises, business scope, operating period, and the subscribers‘ or partners‘ names, addresses and identity card numbers. Article 12 To establish unlimited liability merchants, the applicants or their consignees shall submit to the Registration Organization the following documents: (1) Application forms for commercial registration, which are printed by the Registration Organization and signed by subscribers or partners; (2) Documents of approval of names for merchants; (3) Certification of domiciles or addresses; (4) Identification papers specifying the items such as names of persons in charge, subscribers, or partners, etc; (5) Partnership agreements of partnership organizations; and (6) Other documents required by the Registration Organization. Where the registrations of establishment are required to be applied to relevant department for approval according to laws and administrative regulations, the applicants or their consignees shall submit the document of ratification while applying for the registrations. Organization; in case the circumstances are serious, he shall be revoked of his commercial registration (‗Regulations of Shenzhen Special Economic Zone on Business‘ 1999, Shenzhen Municipal Office of Legislative Affairs website http://fzj.sz.gov.cn/en/10.asp – Accessed 15 May 2008 – Attachment 2). Fake Identity Documents in China General information was located to indicate that fraudulent identity documents in may be easily available in China. A 2005 report from the Immigration and Refugee Board of Canada provides the following general summary on the availability of fake documents: A professor of criminal justice at Rutgers University, who has written on Chinese human smuggling, told the Research Directorate that, in his opinion, ―it is pretty easy to obtain all kinds of fake documents in China,‖ including identity documents, birth certificates, university diplomas and hospital documents (Professor 25 Aug. 2005). One organization in Shanghai advertised its services on paper cards that were distributed on the streets and that listed the various types of documents available for purchase (Shanghai Star 29 Aug. 2003). Procurement of fraudulent documents is also facilitated by corruption among local officials (Schloenhardt 2002, 48; Comtex 18 June 2004). The involvement of government officials in procuring fraudulent travel documents is reportedly common but seldom discussed in the Chinese media (ibid.) (Immigration and Refugee Board of Canada 2005, CHN100510.E – China: The manufacture, procurement, distribution and use of fraudulent documents, including passports, hukou, resident identity cards and summonses; the situation in Guangdong and Fujian particularly (2001-2005) , 8 September – Attachment 3). With specific reference to identity cards, a 2005 report from the Immigration and Refugee Board of Canada information decribed the ―first-generation‖ identity cards, which were in use in China until 2004, as being ―relatively easy to counterfeit‖: Prior to 2004, two versions of the first-generation RIC were most widely used in China (Canadian Consulate General in Hong Kong 9 Dec. 2004) ( the older version, which contains a 15-digit ID number, and the newer version, which contains an 18-digit ID number (ibid.). The newer version of the ID card was first issued in October 1999 (ibid.). …The first-generation RIC is relatively easy to counterfeit as it is made of laminated paper, and can reportedly be bought on the streets for a ―few hundred yuan‖ [300 yuan= Cdn. $44.39 (Xe.com 22 Feb. 2005)] (U.S. Law Library of Congress 7 July 2004). In addition, these cards, which are issued by provincial authorities, do not have a nationwide tracking number so fraud detection is difficult (ibid.). According to the Ministry of Public Security (MPS) official in charge of the Second-Generation ID Card Replacement Office, the first-generation ID card ―adopts photochemical reaction and lithographic as the main printing technology, which can be forged or imitated easily‖ (AIT Event 2003). The official also stated that the government had encountered serious problems with forged RICs being used in committing crimes (ibid.). According to information provided to the Research Directorate by a program officer with the Intelligence and Interdiction Unit of Citizenship and Immigration Canada (CIC) in 1999, [b]oth counterfeit cards and fraudulently obtained but legitimately produced cards are obtainable and in circulation, and ... possession of a legitimately produced identity card does not guarantee that it was legitimately obtained (Immigration and Refugee Board of Canada, 2005 CHN43360.E – China: National Resident Identity Cards; background information; description; issuance procedures, 24 February – Attachment 5). The same report provided information to indicate that in 2004, the roll-out of new ‗second- generation‘ ID cards, with improved security features, commenced in several cities, including Shenzhen: In order to decrease the incidence of fraud and counterfeiting, the Chinese government introduced the second-generation ID card (also called the ―smart card‖) (U.S. Law Library of Congress 7 July 2004; AIT Event 2003). In order to avoid duplicates, each resident will be issued a nationally unique identity card number (Canadian Consulate General in Hong Kong 9 Dec.
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