New Measures Regulate Financial Affairs of Venues for Religious Activities

New measures have entered into force on a trial basis in China that regulate the financial affairs of registered venues for religious activities in China. The State Administration for Religious Affairs (SARA) passed the Measures on the Supervision and Management of Financial Affairs of Venues for Religious Activities (Trial) (Financial Affairs Measures) on January 7, 2010, effective March 1. Like the other sets of measures on religion-related issues issued by SARA in recent years, the Financial Affairs Measures elaborate on provisions in the Regulation on Religious Affairs (RRA), which entered into force in 2005. While stipulating more specific oversight for religious venues, the Financial Affairs Measures also provide a measure of protection for venues' property and income. SARA described issuing the measures to strengthen the government's role in "supervising and managing" the financial affairs of religious sites and to address issues such as religious venues' "nonstandardized management of finances," cases of waste and embezzlement, and incidents of government offices, individuals, or other entities "seizing the lawful property of venues for religious activities," according to January 18 and February 10 reports from the SARA Web site. Authorities sought input from religious groups on the Financial Affairs Measures, according to the reports. As specified in Article 2, the Financial Affairs Measures apply only to registered venues for religious activities, thereby excluding unregistered religious sites from this formal system of oversight, including the protective aspects of the measures. Unregistered venues, such as house churches, have faced attacks on their property including confiscation by local officials.

The Financial Affairs Measures build on earlier provisions regulating the financial affairs of religious venues. Article 18 of the RRA requires religious venues to accept the "guidance, supervision, and inspections" of local government departments, in areas including financial affairs and accounting. Article 30 states that the property of religious venues enjoys legal protection and may not be "seized, looted, divided, destroyed, or illegally sealed up, impounded, frozen, confiscated, or disposed of" by any organization or individual. Article 34 stipulates that income from venues' social welfare undertakings adhere to financial and accounting management, while Article 36 of the RRA stipulates that religious organizations and venues implement the state's systems of management for financial affairs, accounting, and tax revenue. The relevant financial stipulations, touched on in the RRA and referred to specifically in the Financial Affairs Measures, are the PRC Accounting Law and the Non-Profit Civil Society Organizations Accounting System. Prior to the implementation of the RRA, Article 8 of the 1994 Regulation on the Management of Venues for Religious Activity specified only that income and property of a religious venue were to be managed and used only by the venue's management group.

Key features of the Financial Affairs Measures include:

• Legal Protection and State Oversight. Article 6 stipulates that venues' property and income enjoy legal protection and includes the same protections as the RRA against seizure, looting, and other forms of infringement by any organization or individual. Under Article 7, the government office with which the venue is registered exercises "guidance and supervision" (zhidao he jiandu) over the venue's financial affairs. The Financial Affairs Measures include penalties for venues that violate the provisions (Article 38), but do not include sanctions for government agencies that abuse their power in implementing financial oversight.
• Financial Management System. Several provisions outline the parameters of maintaining a "financial affairs management system" (caiwu guanli zhidu) within religious venues and the requirements for handling finances. Articles 4 and 5 require venues to have a financial affairs management system led by a "financial affairs management group" (caiwu guanli xiaozu). Under Article 8, venues must keep "truthful and complete" accounting books in accordance with the PRC Accounting Law and the Non-Profit Civil Society Organizations Accounting System. Under Article 11, one person "must not" take on "concurrent posts" in handling the venues' accounting, cashier work, and financial affairs work. The article also calls for "avoiding" the roles being taken on by people related to each other. Article 21 requires expenditures to receive a "signature of agreement" (qianzi tongyi) by the "responsible person" in the financial affairs group (caiwu xiaozu), with approval from the responsible person in the management committee (guanli zuzhi) of the religious venue. "Large expenditures" require that the management committee of the venue "research" and "agree" to the matter, while opinions must be "heard" and "solicited" from religious believers.
• Filing and Reporting Requirements. Under Article 12, venues are to establish a yearly budget, file it with the agency that oversees their registration, and "share the information with local citizens who are religious believers." Article 32 requires that venues submit a financial report at least once a year to the same government agency.
• Definitions of Finances. Several articles define what qualifies as income and expenditures in venues for religious activities. For example, Article 14 defines venues' income to include domestic and overseas donations, and income from providing religious services, entrance tickets to religious sites, the sale of religious goods, art, and publications, income from social welfare charitable undertakings (shehui gongyi cishanshiye) and other social services, state subsidies, and "other legal income." Article 16 covers the handling of donations and donation boxes. Article 20 defines expenditures. Chapter 6 stipulates provisions for the management of fixed assets.

To date, provincial-level regulations have varied in how they specify financial oversight of religious venues. Article 17 of the Hunan Province Regulation on Religious Affairs adopted in 2006, for example, stipulates that venues for religious activities must submit to the relevant accounting and financial affairs management systems of the government and accept the "guidance, supervision, and inspections" of the relevant government departments. The Guangdong Province Regulation on Religious Affairs, adopted in 2000, provides provisions related to the property and income of religious venues (see generally Chapter 6 of the regulation), but does not specify detailed requirements for oversight of general finances or accounting procedures. For more information on provincial regulations on religious affairs, see, e.g., Congressional-Executive Commission on China analyses of the Jiangsu, Hubei, and Hainan regulations, Shanghai, Shanxi, Henan, and Zhejiang regulations, amendments to the Anhui regulation, amendments to the Beijing regulation, and new regulations from Chongqing and Hunan.

For more information on religion in China, see Chapter II-Freedom of Religion in the CECC 2009 Annual Report.