The Regulation on Intermediary Organs Specializing in Overseas Employment is designed to bring Chinese working abroad under the protection of labour laws and labour departments in their destination country.

China's traditional practice has been to let labourers sign contracts with domestic intermediary organs and economic contracts with overseas employers.

However, in industrial disputes, Chinese working abroad were neither protected by the law nor could they ask domestic labour departments to negotiate with their overseas counterparts.

This legal loophole has encouraged a number of intermediary bodies to illegally obtain huge profits from the exploitation of labourers abroad.

To rectify the intermediary market, the regulation, jointly issued by the Ministry of Labour and Social Security, the Ministry of Public Security and the State Administration for Industry and Commerce, has for the first time defined "overseas employment" and required a disbursement fund of at least 500,000 yuan (US$60,241).

According to the regulation, only after Chinese citizens sign work contracts with their overseas employers and receive remuneration for their work done abroad can the employment be called "overseas employment".

The disbursement fund will be mainly used as a reserve to pay fines when intermediary bodies violate the regulation or to compensate clients for losses caused by misconduct.

Meanwhile, the regulation, which came into effect July 1, also requires contracts between clients and intermediary organs and the work contracts between Chinese working abroad and their overseas employers to be filed in China's provincial labour and social security departments.

An annual inspection system is to be established under which all licensed intermediary organs must hand in operation reports to provincial labour and social departments to receive an annual evaluation of business operations and legal matters.

To date, there are more than 50 intermediary bodies with business licenses issued by the Ministry of Labour and Social Security.

(Chinadaily July 4,2002)