Top court announces judicial interpretation on how to deal with confiscated property

The Supreme People's Court on Thursday released a 36-item judicial interpretation giving a clear explanation on how to properly auction or sell confiscated or frozen property.

"Previously, China has no laws or judicial interpretations on how to auction and deal with confiscated property, leading to much corruption in the field," said Huang Songyou, vice-president of the Supreme People's Court, at a press conference on Thursday.

The interpretation says when property confiscated or frozen by courts must be sold to compensate the winner of a lawsuit, an auction is preferable.

Because there is no specify regulation, some courts in the past have directly designated auction houses when they needed to sell confiscated property. Therefore some auction houses often bribed judicial workers to get more business.

The interpretation regulates that in the future courts must randomly choose auction organizations by casting lots in an effort to avoid corruption.

It requires all the participants to pay some cash deposit in advance of the auction for fear that some participants might buy the auctioned goods by giving a very high price and then refused to pay the amount he/she once bid.

The interpretation also makes clear the regulations on auctioneers' commissions. It says if goods are sold for less than 2 million yuan (240,960 US dollars), the auction house can get a commission of no more than five percent; if the auction price is between 2 and 10 million yuan (1.2 million US dollars), the commission should be no more than 3 percent and if the auction price is between 10 and 50 million yuan (6.02 million US dollars),the commission could be no more than two percent.

And if the auction price ranged from 50 to 100 million yuan (12.04 million US dollars), the commission could be no more than one percent and if the auction price exceeds 100 million yuan, the commission can be no more than 0.5 percent.

The judicial interpretation said all the goods must be assigned a base price before auction in an effort to protect the interests of the lawsuit losers.

Source: Xinhua