1. Scope
These standards define the basic principles for the auction of cultural relics and artworks and stipulate the principal procedures and basic requirements.
These standards apply to cultural relics auction activities conducted within the territory of the People’s Republic of China for profit-making purpose.
2. Terms and Definitions
The terms and definitions used herein shall apply to these standards.
2.1 Auction
The means of selling and buying by which specific articles or goods or property rights are transferred through public bidding to the bidder that offers the highest price.
2.2 Parties to Auction
The auctioneer, consignor, bidder, and buyer participating in an auction activity.
2.3 Auctioneer
An enterprise legal person that is established in accordance with the Auction Law and the Company Law of the People’s Republic of China and engaged in auction activities.
2.4 Consignor
A citizen, legal person or other organization that authorizes an auctioneer to auction his or its articles, goods or property rights.
2.5 Bidder
A citizen, legal person or other organization that participates in the bidding for auction objects.
2.6 Object of Auction
The objects or property rights that a consignor authorizes an auctioneer to auction.
2.7 Buyer
A bidder who purchases an auction object at the highest price offered by him.
2.8 Auction Catalogue
The pictures or written materials produced prior to the date of auction to introduce an auction object.
2.9 Auction Rules
The relevant rules that all the parties to auction shall observe.
2.10 Auction Contract
A contract entered into between an auctioneer and a consignor to establish the relationship of consignment for auction.
2.11 Preview
Public display activities, held by the auctioneer, of the auction objects in accordance with the laws.
2.12 Absentee Bid
The service provided by an auctioneer, at the request of a bidder, to transmit the bidding information at auction to the bidder.
2.13 Sales Confirmation
A written confirmation executed by the buyer and the auctioneer to confirm the fact of conclusion of the transaction after it is concluded
3. Basic Principles
The parties in auction activities shall abide by the relevant laws and administrative rules and regulations and adhere to the principles of openness, fairness, justice and good faith, and conform to the principles in the interest of protection and inheritance of historical cultural heritage.
4. Collection of Auction Objects
4.1 Collection Methods
“Collection of auction objects” refers to the activities conducted by an auctioneer to search for and select auction objects. The collection methods include perennial collection and directional collection.
4.2 Collection Requirements
The collection of cultural relics auction objects shall abide by the state regulations of the scope of cultural relics auction objects, and conform to the auction enterprise’s qualifications regarding cultural relics.
The auctioneer may publicize the collection activities through appropriate media prior to the auction. The main details include the time of collection, place of collection, scope of collection, and contact information.
When the auctioneer collects auction objects, relevant professionals shall be arranged to participate in the collection activities on the spot, with a copy of the business license, affixed with the official seal, of the auctioneer or relevant certificates.
Where an auctioneer collects auction objects outside the territory of the People’s Republic of China, the auctioneer shall abide by the relevant state entry/exit provisions for cultural relics administration.
5. Consignment for Auction
5.1 Contents of Auction Contract
Where an auctioneer accepts consignment, the auctioneer shall enter into an auction contract the consignor, which shall include the contents as follows:
- name or title , nationality, certificate number, address, and contact information of both the consignor and the auctioneer.
- author/age, title, texture, form, size, quantity and preservation status of the auction objects;
- reserve price proposed by the consignor for the auction objects;
- time and place of auction, or other details in respect of the arrangement thereof;
- time and manner of delivery or handover of the auction objects;
- evaluation of the auction objects;
- commission and expenses, and manner of and time limit for payment thereof;
- manner of and time limit for payment for the purchase;
- relevant issues in case no transaction is concluded;
- agreement upon issues of confidentiality;
- liability for breach of the contract, including indemnity provisions for losses arising from the consignor’s suspension or termination of auction;
- other matters as agreed upon between both parties.
5.2 Execution of Auction Contract
When the auctioneer and the consignor sign the contract for authorization of auction, the auctioneer shall require the consignor to provide consignor’s identity certificate:
- where the consignor is a natural person, he shall provide his valid identity card or passport or other valid identity certificate admitted by the government of the People’s Republic of China;
- where the consignor is a legal person or other organization, it shall provide its valid registration document, identity certificate of legal representative, or legally effective documentary evidence of consignment;
- where an agent is authorized to sell the auction objects, he shall provide the power of attorney, his and the consignor’s valid identity certificates. The power of attorney shall clearly state the name or title of the agent, the entrusted task(s), and the scope and duration of the power of agency.
When the auctioneer signs the auction contract with the consignor, the auctioneer shall have the right to require the consignor to provide the ownership certificate for the auction objects, or certificates and any other materials certifying that he has the legal right to dispose of the auction objects according to law, and to state clearly the defects of the auction objects.
The auctioneer and the consignor shall accurately, clearly, and completely fill out each of the items of the contract. A contract with an appendix shall indicate the number of the master contract in the appendix.
The contract for authorization of auction shall be executed in at least three (3) counterparts, one (1) for each of the department of finance and department of operation of the auctioneer, and the consignor.
Where any amendment is required for the auction contract, such amendment may be directly made in the original contract, or a supplementary agreement may be executed. Where amendment is directly made in the original contract, the places of the amendment shall be signed by the parties for confirmation.
5.3 Administration of Auction Contract
The auctioneer shall establish an administration system for auction contracts to track the performance of the contracts, adopt necessary confidentiality measures, and properly retain the contracts.
6. Evaluation and Verification of Auction Objects
6.1 Procedure of Evaluation and Verification
The auctioneer shall preliminary have the collected auction objects evaluated, prior to the conclusion of the auction contract, and determine whether or not to accept the consignment based on the evaluation results.
Where the auctioneer deems it necessary to have the auction objects further evaluated after the conclusion of the contract for authorization of auction, the evaluation may be conducted according to law. In case of any discrepancy between the evaluation results of the auction object and the descriptions of the auction objects as specified in the contract for authorization of auction, the auctioneer shall have the right to demand modification or cancellation of the contract.
The auctioneer shall, according to law, report the auction objects which are planned for auction to the administration agency of cultural relics under the people’s government of the province, autonomous region, or municipality directly under the Central Government for verification, and determine whether or not to auction based on the verification opinions. If the auction objects fail to pass the verification, the auctioneer shall advise the consignor and cancel the contract for authorization of auction of the auction object.
6.2 Records of Verification
Where the auctioneer has the auction objects evaluated, records of verification shall be produced, which shall include the time and place of evaluation, evaluator or evaluation agencies, evaluation opinions and conclusions.
7. Maintenance of Auction Objects
7.1 Basic Warehouse Facilities
The warehouse for auction objects shall be equipped with applicable monitoring, alarm, and fire-extinguishing systems, to meet the basic storage requirements for different types of auction objects. For the auction objects with special requirements, corresponding facilities for waterproofing, dust-proofing, insect prevention, fire prevention, and security against theft may be installed as the case may be.
7.2 Storage of Auction Objects
Where an auction object is stored in a warehouse, an appropriate storage method shall be chosen according to material, packing shape, and quality and safety requirements, to keep the auction object from any damage.
7.3 Warehouse Safety Management
Smoking and lighting fires are strictly prohibited in the warehouse. The sign indicating “no smoking or open flame” shall be displayed in a prominent place. Fire-fighting equipment shall be inspected regularly, and be repaired or replaced immediately in case of any failure.
The warehouse management personnel shall be present when non-warehouse management personnel enter the warehouse;
All persons who enter the warehouse shall not carry any personal suitcases, handbags, overcoats, rain gears, and inflammables and explosives. In the warehouse, it is not advisable to use such stationery as pens or stamp-pads and ink, which can easily stain the auction objects.
The warehouse keeper must inspect all warehouse facilities before and after work shift, and fill out an inspection record.
7.4 Warehousing of Auction Objects
The auctioneer shall warehouse the collected auction objects in a timely manner. The warehouse keeper shall verify and check the warehousing auction objects based on the auction contract. If there is no discrepancy after the check, the warehouse keeper shall sign after receiving the auction objects, and establish a register account for the incoming auction objects that shall be stored at the appointed stock position. Objects stored temporally shall also be entered in the account.
Where the warehouse keeper finds that the title, specifications, quantity or packaging of the warehousing auction objects fails to conform to the descriptions in the auction contract, he shall immediately notify the department of operation.
7.5 Delivery of Auction Objects out of Storage
7.5.1 Temporary Delivery out of Storage
Where the auction objects are temporarily delivered out of storage for the purposes of evaluation, photographing, or itinerant exhibition, the person who handles them and the warehouse keeper shall properly conduct the handover formalities. At the time of return, the person who handles the auction objects shall hand over the objects in the warehouse keeper’s presence.
7.5.2 Buyer Taking Delivery
The auctioneer conducts the formalities of taking delivery for the buyer based on a receipt of delivery voucher. After the buyer takes delivery of the object(s), the auctioneer shall immediately draw back the receipt of delivery voucher on the spot.
If the buyer appoints another person to take delivery of the article(s), the agent appointed shall produce the power of attorney of the buyer and the receipt of delivery voucher for the object(s). The power of attorney shall clearly state the name or title of the agent, the type and number of his identity certificate, authorized task(s), and the scope and duration of the power of attorney. The auctioneer shall check and reproduce a copy of the agent’s valid identity certificate for its own record.
7.5.3 Return of Auction Objects
Where the auction objects are not auctioned or sold, the auctioneer shall promptly notify the consignor to process the return formalities based on a valid identity certificate and relevant vouchers, to receive the auction objects.
If the consignor appoints another person to deal with matters related to reception, the agent shall produce the power of attorney of the consignor, which shall clearly state the name or title of the agent, the type and number of his identity certificate, authorized items, and the scope and duration of the power of attorney. The auctioneer shall check and reproduce a copy of the agent’s valid identity certificate for its own record.
7.6 Warehouse Inventory Management
The auctioneer shall establish a regular inventory system to take a regular inventory of the stock auction objects. In case of any difference between the total in inventory and the total in account, the auctioneer shall promptly find out the cause in conjunction with relevant departments, and handle it in a timely manner.
Where the warehouse keeper changes his job post, he shall implement the handover of the auction objects in accordance with provisions.
7.7 Handling and Package
To secure the safe transportation of the auction objects, the auction objects when temporarily delivered out of storage, shall be packed properly according to the different materials of the objects to meet the requirements of short or long distance transport. The auctioneer may develop technical requirements of packing for short or long distance transport based on the real conditions and the characteristics of various types of auction objects.
8. Production of Auction Catalogue
8.1 Purpose
Prior to auction activities, the auctioneer shall produce an auction catalogue, so that the relevant parties can learn about the auction activities and the general information of the auction objects.
8.2 Contents of Catalogue
An auction catalogue usually includes the following: title of the auction, time and place of preview and auction, auction rules and other information each party to auction should be aware of, document for authorization of bidding, contact information of the auctioneer, general information and special instructions of the auction objects. The said general information includes title, author and his date of birth, age, form, texture, size, seal, preface and postscript, reference price and other information, of each auction object.
The contents of the auction catalogue shall be subject to the verification of the departments in charge of the administration of cultural relics under the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government,
The auctioneer shall give a special mark in the auction catalogue to an auction object which is forbidden to leave the territory, and/or which has no reservation price.
As requested by a bidder, the auctioneer may provide a report on the conditions of the auction objects, as a supplement to the auction catalogue.
All the auction objects shall be set up and printed on the auction catalogue, and may be supplemented with pictures where necessary. The pictures shall show the real conditions and quality of an auction object as accurately as possible.
9. Implementation of Auction
9.1 Declaration and Registration
Prior to the auction, the auctioneer shall complete a declaration and registration of the auction with relevant administrative department in charge under the relevant laws and administration regulations.
9.2 Announcement of Auction
The auctioneer shall announce the opening of an auction at least seven days prior to the date of auction. The announcement of auction shall include the following: time and place of auction, auction objects or auction number, time and place of preview of the auction objects, formalities required to complete for participating in bidding, contact information of the auctioneer, and other matters that need to be announced.
9.3 Schedule and Setup of Job Posts
The schedule of auction customarily includes: dates and duration of each of the phases of press releases, announcement of auction, preview of auction objects, live auction, financial settlement, handover of auction objects, and other information.
Such main posts shall be set up as on-sight direction, reception, security, press, liaison and coordination, and logistics support.
9.4 Display of Auction Objects
9.4.1 Preview of Auction Objects
The auctioneer shall display the auction objects prior to the auction and provide relevant information and conditions for bidders to view the auction objects. The duration of display shall be no less than two days.
The place of preview shall conform to the relevant requirements of the state for locations for displaying cultural relics and artworks. The display panels, display stands, and lighting devices shall conform to the national standards of safety.
The auctioneer may hire a professional organization to be in charge of design of the display areas and the setup of the display site.
9.4.2 Setup of Display Site
The auctioneer may set up as required: the layout chart of exhibition location, computing, communication and camera systems, reception, bidding registration office, settlement office, media reception, absentee bid office, catalogue and file distribution office.
Under the relevant provisions of the state, safe evacuation plans shall be clearly displayed in a prominent place.
9.5 Registration of Bidder
To complete the registration formalities, if the bidder is a natural person, he shall provide his valid identity certificate; if the bidder is a legal person or other organization, it shall provide its valid registration document, identity certificate of legal representative, or legally effective documentary evidence of consignment. If a bidder authorizes another person to go through such formalities, the agent shall provide the power of attorney, and his and the bidder’s valid identity certificates.
The auctioneer and the bidder shall enter into a bidding agreement, which includes: general information of the auctioneer and the bidder, bidding number, the major rights and obligations of both parties during auction, and the auction rules acceptable to the bidder.
The auctioneer may collect from the bidder a bidding deposit of a certain amount, and provide a receipt for the bidding deposit to the bidder.
The bidding paddle provided by the auctioneer is the sole voucher of the bidder’s authority to participate in the bid on site.
9.6 Entrustment of Bid and Absentee Bid
A bidder may take part in bidding himself or authorize his agent to participate in it. The bidding results and the relevant legal liabilities shall be assumed by the bidder.
A bidder may make a written request for absentee bid to the auctioneer. If the auctioneer accepts the bidder’s request for absentee bid, he shall arrange a seat on site to provide the bidder with the service of transmission of bidding information.
9.7 Auction Sale
9.7.1 Meeting-place Setup Requirements
The auctioneer shall make reasonable arrangements for the meeting-place of the auction according to the conditions of the auction objects and the number of the bidding paddles issued.
The auctioneer may arrange a projector system and monitoring system, and set up seats for absentee bid as required.
The auctioneer shall put in place the fire control measures.
9.7.2 Chairing Auction
The auction master shall announce the auction rules and instructions before the auction sale takes place.
In principle the auctioneer shall conduct auction successively in accordance with the sequence number on the auction catalogue. In case of any adjustment, explanations shall be given before the auction sale takes place.
Where there is no reservation price for an auction object, the auctioneer shall make it clear before the auction sale.
9.7.3 Rules of Reservation Price
Where there is a reservation price for an auction object, the highest price offered by a bidder shall be non-binding if it fails to reach the reservation price, and the auctioneer shall suspend the auction sale of such object.
9.7.4 Conclusion of Auction Transaction
An auction transaction is concluded after the highest offer is confirmed by the auctioneer by knocking the hammer or through any other method of public confirmation.
After a transaction is concluded, the buyer and the auctioneer shall sign a written confirmation.
9.7.5 Auction Minutes
Minutes of auction shall be made while an auction sale is under way. Such minutes shall be signed by the auctioneer and the recorder, as well as the buyer where a transaction is concluded.
10. Auction Settlement
10.1 Settlement by Buyer
After the conclusion of an auction transaction, the buyer conducts the matters of settlement with the auctioneer based on the sales confirmation and the receipt of bid deposit.
If the buyer appoints another party to pay, the agent shall provide the power of attorney of the buyer. The auctioneer shall check and reproduce a copy of the agent’s valid identity certificate for its own record.
10.2 Settlement by Consignor
10.2.1 Settlement Procedures
When the auctioneer receives payment from the bidder, the auctioneer shall settle with the consignor as mutually agreed. If the consignor authorizes another person to handle the matters of settlement, the agent shall provide the power of attorney of the consignor. The auctioneer shall check and reproduce a copy of the agent’s valid identity certificate for its own record.
The auctioneer shall be obliged to withhold and collect taxes in accordance with the relevant national tax stipulations.
10.2.2 Relevant Expenses
10.2.2.1 Insurance Expenses
Where the consignor has transferred the auction objects to the auctioneer, if the consignor requires insurance of the auction objects, then the auctioneer shall insure the auction objects, at the expense of the consignor.
Where the consignor has transferred the auction objects to the auctioneer, if the auctioneer requires insurance of the auction objects, then the consignor can arrange insurance in his own discretion, or the auctioneer can arrange such insurance on behalf and at the expense of the consignor.
10.2.2.2 Storage Charge
Where the consignor has transferred the auction objects to the auctioneer, if both parties agree not to insure the auction objects or if the auction objects are not insurable, then the auctioneer may collect reasonable storage charges from the consignor.
Where a consignor fails to collect the auction objects, which are not auctioned or concluded with transaction within the prescribed period, or a buyer fails to collect the auction object within the prescribed period, the auctioneer shall have the right to demand storage charges incurred thereby.
11. Auction File Management
11.1 Terms of File Maintenance
The auctioneer shall properly maintain the files and relevant materials. The term for maintaining such files and materials shall be no less than five years, commencing from the date of termination of the auction contract.
11.2 Scope of Files and Materials
The files and materials include:
- the auction contract, certificates and any other materials provided by the consignor certifying that the consignor has the title or the right of disposal to the auction objects, copies of certificates and licenses, and the relevant materials in respect of storage, insurance, handover, and other information, of the auction objects.
- announcements of auction, including press clippings, video and audio recordings from broadcast, which carry the announcement of auction.
- materials of the auction objects, including auction catalogue, various pictures, text information, and evaluation records related to the auction objects, and approval documents of relevant departments.
- video and text information of the preview and auction sale.
- documents of bidding registration, including bidding agreements, copies of bidders’ identity certificates, the power of attorney for absentee bid, and copies of agents’ identity certificates.
- auction rules, instructions, and important statements etc..
- conclusion confirmation and auction minutes.
- a complete set of account books and any other relevant materials relating to auction business operations.
11.3 Management of Files and Materials
The auctioneer may choose the methods of file management in its own discretion. The methods include: archiving based on each auction or archiving with categories based on the materials contained.
The materials of auction shall be true, accurate, complete, and allow for easy reference. Each file of auction shall be created with a catalogue and serial number.
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