Notice of the Guangzhou Municipal Intellectual Property Office on Printing and Distributing the Administrative Measures for the Risk Compensation Mechanism of Intellectual Property Pledge Financing in Guangzhou

2023-07-17

Guangzhou Municipal Intellectual Property Office

Regarding the issuance of intellectual property pledge financing in Guangzhou

Notice of the Measures for the Management of the Risk Compensation Mechanism

Sui Zhi Gui Zi [2023] No. 2

Intellectual Property Offices of all districts and relevant units:

In order to implement the "Outline for the Construction of an Intellectual Property Power (2021-2035)" and the "Notice of the State Council on Printing and Distributing the 14th Five-Year Plan for the Protection and Use of National Intellectual Property Rights" (Guo Fa [2021] No. 20), our bureau has adjusted and optimized the risk compensation mechanism for intellectual property pledge financing in Guangzhou, and formulated the "Administrative Measures for the Risk Compensation Mechanism of Intellectual Property Pledge Financing in Guangzhou", which is hereby issued to you for your compliance. Problems encountered in the implementation should be reported to the Municipal Intellectual Property Office.

Guangzhou Municipal Intellectual Property Office

July 12, 2023

Guangzhou Municipal Measures for the Administration of Risk Compensation Mechanism for Intellectual Property Pledge Financing

Chapter I: General Provisions

Article 1: These Measures are formulated so as to implement the "Outline for the Construction of an Intellectual Property Power (2021-2035)" and the "Notice of the State Council on Printing and Distributing the 14th Five-Year Plan for the Protection and Use of Intellectual Property Rights" (Guo Fa [2021] No. 20), and to establish and regulate the risk compensation mechanism for intellectual property pledge financing in Guangzhou (hereinafter referred to as the "risk compensation mechanism").

Article 2 The term "risk compensation" as used in these Measures refers to the special fund of no more than 50 million yuan from the special fund for intellectual property work in Guangzhou every year in order to strengthen intellectual property financial services and promote the work of intellectual property pledge financing in Guangzhou, which shall be used to guide the cooperative banks to increase the support for intellectual property pledge financing loans for small, medium and micro enterprises, and to provide certain compensation for the loss of the principal of non-performing loans of cooperative banks in accordance with the provisions of these Measures.

Article 3 The term "intellectual property pledge financing" as used in these Measures refers to a financing act in which the intellectual property rights holder pledges intellectual property rights such as patents, trademarks, geographical indications or integrated circuit layout designs (hereinafter referred to as "intellectual property rights", all of which specifically refer to the intellectual property rights mentioned above) to the cooperative bank individually or in combination to obtain loans.

Article 4 The competent authority referred to in these Measures refers to the Guangzhou Municipal Administration for Market Regulation (Intellectual Property Office). The responsibilities of the competent authority are as follows:

(1) Take the lead in organizing the establishment of a risk compensation mechanism for intellectual property pledge financing, and determine the key industries to be supported by the risk compensation mechanism.

(2) Responsible for the supervision and management of the operation of the risk compensation mechanism, and take the lead in formulating relevant management measures.

(3) Responsible for applying for the annual financial budget and disbursement of compensation funds for the risk compensation mechanism in accordance with the procedures. Return the recovered collection and disposal funds to the municipal treasury.

(4) Responsible for carrying out the selection of trustee management institutions and managing the trustee management institutions, and specific measures shall be formulated separately.

(5) Responsible for reviewing the non-performing loan declaration and compensation materials submitted by the entrusted management institution, reviewing and approving the non-performing loan compensation list, and ensuring that the compensation funds are used legally and compliantly.

(6) Guide the trustee management institution to carry out the solicitation, management and withdrawal of cooperative banks.

Article 5 The term "entrusted management institution" in these measures refers to the institution entrusted by the competent department to undertake the daily management service responsibilities of the risk compensation mechanism.

Article 6 The term "cooperative bank" as used in these Measures refers to commercial banks with intellectual property pledge financing products that voluntarily abide by the provisions of these Measures and are publicly solicited and selected by the trustee management institution.

Article 7 The budget and use of funds for the risk compensation mechanism shall follow the principles of "inclusive development, appropriate guidance, market operation, and limited guarantees".

Chapter II: Compensation Objects, Conditions and Standards

Article 8 The object of risk compensation shall be the cooperative bank.

Article 9 The borrower applicable to these Measures shall meet the following conditions at the same time:

(1) The borrower is a micro, small and medium-sized enterprise that has carried out economic activities within the administrative area of Guangzhou for more than one year, and the delineation standards for micro, small and medium-sized enterprises comply with the provisions of the Notice of the Ministry of Industry and Information Technology, the National Bureau of Statistics, the National Development and Reform Commission, and the Ministry of Finance on Printing and Distributing the Provisions on the Classification Standards for Small and Medium-sized Enterprises.

(2) The borrower has not been included in the enterprise credit reporting system of the People's Bank of China as a non-performing loan with a subordinate, suspicious or loss record within three years.

Article 10 The loan applying for financial compensation must meet the following conditions at the same time:

(1) The loan complies with the provisions of Article 3 of these Measures on intellectual property pledge financing.

(2) The loan has been included in the project management of the risk compensation mechanism.

(3) The loan must be used for the borrower's technological research and development transformation, or project industrialization, or intellectual property development, or working capital turnover and other activities, and shall not be used for other purposes such as entrusted loans, merger and acquisition loans, private lending, and investment in the capital market.

(4) The loan has not enjoyed other loan risk compensation policies in Guangzhou.

Article 11 The loan project for which the applicant for financial compensation is applied must be overdue for more than 90 days, or listed in the People's Bank of China's non-performing loans classified as subordinated, doubtful or loss.

Article 12 The amount and standard of applying for financial compensation:

(1) The total amount of annual application for compensation in the city shall not exceed 50 million yuan.

(2) The proportion of compensation for the loss of the principal of each non-performing loan shall be 50%. The loan is secured by a combination of intellectual property rights and other collaterals, and the calculation of the loan principal only includes the amount of the intellectual property pledge financing. For other portfolio-secured loans, the loan amount of the pledge of intellectual property rights shall be specified in the loan contract, and compensation shall not be made if it is not specified.

(3) The risk compensation mechanism compensates small and medium-sized enterprises for the part of a single loan not exceeding 10 million yuan; The loan amount that can be included in these measures for the same borrower in the same year shall not exceed 20 million yuan according to the financing time. The excess risk is borne by the cooperating bank that lends the loan.

(4) The amount of risk compensation applied by a single cooperative bank each year shall not exceed 5% of the actual loan amount of the financing projects that have been included in the risk compensation pool of the institution in that year.

Chapter III: Work Procedures

Article 13 The entrusted management fee of the risk compensation mechanism shall be composed of the basic management fee and the performance management fee, and shall be included in the budget of the competent department, and the specific cost shall be determined in the entrusted management agreement of the entrusted management institution.

Article 14 The entrusted management institution is responsible for the daily operation and management of the risk compensation mechanism in accordance with these measures and the entrusted management agreement. The risk compensation mechanism establishes a risk compensation pool, and the financing projects generated through these measures shall be managed in the pool, in accordance with the following procedures:

(1) Application for warehousing. The borrower initiates an application for the risk compensation mechanism and a financing application to the trustee.

(2) Financing process. The trustee shall review the borrower's application materials, etc., and include them in the database of financing enterprises under the risk compensation mechanism after the review is passed. The cooperative bank forms a credit plan after completing due diligence. The cooperative bank signs a pledge (loan) contract with the borrower, registers the pledge and arranges the release of funds.

(3) Project management. Cooperative bank loan projects should be included in the risk compensation pool management.

Article 15 The trustee shall formulate and standardize the post-loan management system, and cooperate with the institution to strengthen the post-loan management of the project.

Article 16 The application for risk compensation for non-performing loans under the risk compensation mechanism shall be handled in accordance with the following procedures:

(1) For non-performing loans that meet the conditions for compensation, the cooperative bank shall submit an application for compensation to the trustee management institution, and after examination and approval by the trustee management institution, it shall be submitted to the competent department for examination and approval. When the total overdue rate of a project in the risk compensation pool exceeds 5% (inclusive), the approval of new risk compensation projects will be suspended. After the total overdue rate of the project drops below 5%, the risk compensation business will be resumed. During the suspension period, projects that have been generated but have not yet completed the repayment of principal and interest shall perform the risk sharing responsibility in accordance with the provisions of the cooperation agreement.

(2) After the entrusted management institution completes the review of the information of the insurance project in the compensation cycle in accordance with the regulations, it shall be submitted to the competent department for review and approval.

(3) After the budget for the special fund for intellectual property work is issued, the competent department shall allocate the compensation funds to the compensating cooperative bank according to the review and approval.

(4) After the implementation of the risk compensation mechanism, the recovery entity is responsible for the disposal of the pledge and the recovery of debts in accordance with the contract and legal provisions, and the recovered funds shall be returned to the account of the competent department in accordance with the proportion of 50% of the funds obtained by the recovery entity, and then returned to the municipal finance by the competent department.

(5) If the borrower goes bankrupt, or the enforcement of the civil judgment, arbitration award and other legal documents that have taken effect after the borrower's litigation or arbitration is concluded, and the cooperative bank has performed the recovery procedures and obligations in accordance with the contract and relevant laws and regulations, the cooperative bank shall submit an application, and the entrusted management institution shall conduct a preliminary examination, and after reporting to the competent department for approval, the final loss part of the compensation shall be written off.

(6) The following information shall be submitted to apply for verification:

1. The cooperative bank submits an application for write-off. The application materials for write-off include: the application for the write-off of the compensation funds of the risk compensation mechanism for intellectual property pledge financing in Guangzhou, and the written materials such as the basic information of the enterprise, the loan issuance and management, the loan compensation and recovery, and the compensation losses formed.

2. A civil judgment of the court or other legal documents that can confirm the formation of losses.

Chapter IV: Supervision and Management

17th competent departments, entrusted management institutions and other units should establish an information communication mechanism, strengthen supervision and inspection, the competent departments may entrust accounting firms and other intermediaries to conduct special audits and inspections on the use and management of funds, entrusted fees into the budget of the competent departments.

Article 18 The trustee and the cooperative bank shall strengthen the post-loan management and supervision of the risk compensation mechanism project, and the cooperative bank shall submit the post-loan supervision report and financing implementation to the trustee on a quarterly basis. The trustee shall submit the loan statistical report and the post-loan supervision report to the competent department on a quarterly basis.

Article 19 The cooperative bank shall strengthen the innovation of intellectual property pledge loan products and provide credit lines for intellectual property pledge financing.

Article 20 Where the borrower is unable to repay the principal and interest on time, or if the borrower has not yet been substantially overdue but has serious deterioration in business conditions, or is expected to be unable to repay the principal and interest of the loan due due due to other major adverse effects, the cooperative bank shall promptly notify the trustee to jointly verify the borrower's ability to repay the loan.

Article 21 Where a cooperative bank repeatedly applies for loan risk compensation in Guangzhou for the same non-performing loan, the competent department shall order it to make corrections, recover the compensation funds, and cancel the qualification of the cooperative bank.

Article 22: Where the entrusted management institution commits fraud, conceals the truth, colludes in cheating, etc., the competent department shall cancel the qualification of the entrusted management institution and pursue legal responsibility in accordance with law.

Article 23: Where competent departments, entrusted management bodies and their staffs fraudulently obtain, misappropriate, or misuse funds from the risk compensation mechanism, the relevant units and personnel shall be punished in accordance with regulations, and legal responsibility shall be pursued in accordance with law.

Chapter V: Supplementary Provisions

Article 24 The stock projects that have been pooled after the expiration of the original Guangzhou Intellectual Property Pledge Financing Risk Compensation Fund shall be included in the scope of support of these Measures.

Article 25: These Measures shall be implemented as of the date of promulgation and shall be valid until January 18, 2028. The Notice of the Guangzhou Municipal Intellectual Property Office on Printing and Distributing the Administrative Measures for the Risk Compensation Fund for Intellectual Property Pledge Financing in Guangzhou (Sui Zhi Gui Zi [2020] No. 1) shall be repealed at the same time.

Source: Guangzhou Intellectual Property Office