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Transaction Rules for Consignment Business of Guangzhou Diamond Exchange (Proposed)


April 8th of 2018

Article 1 In order to normalize the consignment sales business of Guangzhou Diamond Exchange (“GZDE”) and safeguard the lawful rights and interests of transaction parties, these Transaction Rules are hereby formulated in accordance with the provisions of the Contract Law of the People’s Republic of China and other relevant laws and regulations.

Article 2 These Rules shall be complied with for carrying out the consignment sales activities of diamond on the transaction platform of GZDE. Where laws and regulations make other provisions with respect to consignment sales, such provisions shall govern.
Article 3 When used in these Rules, Goods Sold on Consignment refer to diamond articles that Consignors entrust GZDE for consignment sale.

When used in these Rules, Consignment Sales Stores refer to the places self-possessed or specified by GZDE in bonded zones, and e-transaction systems specified by GZDE and having the online transaction function.

When used in these Rules, Consignors refer to the diamond supply enterprises having the demand on consignment sales, including but not limited to the members of GZDE.

When used in these Rules, Buyers, shall be trading members of GZDE, unless GZDE makes special grants.

For the cross-border transaction, Consignors or buyer in the Mainland China territory shall apply for the official registration of foreign exchange receipts and payments.

The trading days of GZDE are from Monday to Friday every week (excluding Chinese statutory festivals and holidays, and the date when GZDE announces the stop of transaction), and the trading hours are 9:00-17:00 of every trading day. If the trading hours are adjusted, GZDE would issue an announcement one trading day ahead, unless it’s necessary to stop trading temporarily due to the demand of special emergencies.

Article 5 Consignment sales business shall be carried out according to the procedures for Consignors’ filing of applications, examination and inspection, entrusting for consignment sales, information issue, contract signing and deal clinching, inspection and acceptance of objects, capital settlement, etc.

Article 6 Before entrusting GZDE for consignment sales, the Consignor shall file an application for entrusting consignment sales to GZDE, submit relevant documents and originals of vouchers (such as the information on the objects for consignment sales, ownership certificate, source of objects, certificate of origin, vouchers of purchasing and sales, quality certificate, etc.) to GZDE for examination, and guarantee the authenticity, completeness, accuracy, legality and validity of the documents and materials provided, such as the above-mentioned documents and vouchers, etc.

Article 7 GZDE shall carry out formal examination on the above-mentioned materials submitted by Consignors. GZDE shall not assume any responsibility for, including but not limited to, guaranteeing the compliance of the Consignor’s capacity as subject, the legal source of the subject matters for consignment sales, the flawless quality and right of the subject matters for consignment sales, as well as the authenticity, completeness, accuracy, legality and validity of the statements and commitments made, and the documents and materials provided by Consignors, etc.

Article 8 After the above-mentioned materials pass examination, GZDE may entrust a third party test institution to check and verify the information on the objects assigned by the Consignors for sales if necessary. Where the objects meet the requirements of GZDE on consignment sales, the objects will be transferred for listed sale to the Consignment Sales stores. Objects for consignment sales shall enter into the warehouse of the consignment sales store. For goods, the transfer shall be deemed as completed after the transferor and the transferee finish signing the transfer list; Where before completion of transfer, the goods for consignment sales are damaged, lost, or fall into other circumstances which induce the drop in the value of such goods for consignment sales, all risks and responsibilities shall be assumed by the Consignors.

Article 9 GZDE and Consignment Sales Stores’ working personnel shall do work safely, receive and send physical objects for consignment sales in time and correctly:

(1) GZDE and Consignment Sales Stores’ working personnel shall be responsible for checking the warehousing of the goods for consignment sales and guaranteeing the accurate ex-warehousing of the objects for consignment sales;

(2) GZDE and Consignment Sales Stores’ working personnel shall make an inventory of goods in warehouse at least once weekly;

(3) Goods shall be handled carefully to guarantee the soundness of the objects for consignment sales.

Article 10 For entrusted consignment sales, the Consignor and GZDE shall sign the Contract for Consignment Sales of Goods.

Article 11 GZDE will issue the information on Consignors and objects consigned for sale by Consignors through Consignment Sales Stores to search buyers.

Article 12 An intended buyer may apply to GZDE for checking goods on the spot of Consignment Sales stores or Designated warehouse. After the application is agreed by GZDE, the intended buyer may see goods under the guide of working personnel of GZDE according to the time and place notified by GZDE. When seeing goods, the intended buyer shall observe the management requirements of working personnel of GZDE.

Article 13 After deciding the intention of purchasing, an intended buyer shall sign the Transaction Contract with GZDE, make payment for goods to GZDE according to the price stipulated in the contract, then delist the goods for consignment sales, and organize inspection and acceptance and pickup of goods. The inspection and acceptance as well as pickup of goods shall be carried out according to the arrangement (such as the time of and procedures for inspection and acceptance as well as pickup, etc.) of GZDE.

Where the buyers take goods out of bonded zone after inspection and acceptance as well as pickup of goods, relevant taxes and fees for declaration formalities shall be solely borne by buyers. Buyers shall be responsible for risk of goods when the date of inspection and pick up by buyers.

Where the buyers do not pick up goods after inspection acceptance, the buyers may file a written application to GZDE according to these Rules, and GZDE will make following procedures as appropriate for the buyers.

Article 14 GZDE shall carry out uniform settlement on consignment sales business. The buyer can pay US dollars or RMB to GZDE, and then GZDE deposit the payment to the Consignor in 7 (seven) working days.

For cross-border transactions, the buyer can entrust GZDE to purchase foreign exchange, the actual exchange rate would be subject to the day when to buy foreign exchange according to the bank currency rate. The corresponding charges shall be beared by the buyer.

Article 15 GZDE shall collect service charges for consignment sales from Consignors and service charges for transaction from buyer according to contract contents, and the specific charging standards shall subject to the Measures for Charging of Guangzhou Diamond Exchange(unless otherwise agreement).

Article 16 Consignment sales activities shall be carried out according to national laws and regulations, and the provisions of the agreement between parties concerned, and shall be free of the following behaviors:

(1) Transactions of illegal source, unclear ownership, or having ownership disputes;

(2) Transactions promoted by means of threatening, fraud, disguising information, malicious collusion, etc., and damaging the lawful rights and interests of the country, the collective or other persons; or

(3) Transactions for illegal currency arbitrage.

(4) Other behaviors forbidden by laws and regulations.

Article 17 Where Consignors or buyers violate the provisions of Article 16 or fall into other circumstances affecting normal transactions, GZDE shall have the right to suspend or terminate the consignment sales business in process without assuming the liability for breach of contract; where GZDE suffers losses arising therefrom, relevant responsible party shall be liable to GZDE for the responsibility of compensation.

Article 18 Where the objects for consignment sales are sourced illegally, have flaws with rights, or have quality problems, and some information which should be disclosed is not disclosed, etc., thus causing losses to a buyer, the buyer shall directly hold the Consignor for liabilities, the Consignor shall be directly liable to for the buyers, and GZDE shall not assume any liability.

Article 19 Where the Buyer and the Seller violate relevant provisions of laws and regulations, etc., GZDE may submit such violation to regulatory institution for punishment, or request the competent judicial department to investigate the parties into legal liabilities in accordance with law.
Article 20 These Rules are only applicable to the GZDE’s diamond and jewelry consignment sales business, and the final right of interpretation hereof shall be owned by GZDE. These Rules shall come into force since the date of issue.

Article 21 The rules are written in Chinese & English shall enter into force from the date of promulgation, if there is any ambiguity, the Chinese version shall prevail.

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