BP screws America. Again. Iranians chuckle.

You know, after all this time, I figured an oil company wouldn't screw over America. Again. But what do I know? (note: lots of sarcasm there - remember, I grew up in Jersey) BP aka Beyond Petroleum aka British Petroleum has done it again. The massive oil spill in the Gulf of Mexico, the largest in US history triggered by the explosion of the Deepwater Horizon rig, is wreaking havoc on the region. The damage is mind-boggling. BP is about to start a 3rd try at containing the spill - the previous two have failed. How good were the previous plans? Well, besides failing, they sounded ridiculous as well, as the Daily Show nicely pointed out. But instead of talking about the environmental damage done by the tragedy down south, or the abysmal lack of regulations/inability of Congress to update regulations on deep sea drilling (part of the issue is we're using standards from the 1970s, back when we weren't drilling anywhere near as deep in the sea as we are now), or the obvious and ridiculous amount of control the oil industry holds on our government (BP is fighting regulations, and might succeed - seriously), I'm going to give you a short history lesson. You see, BP screwed over America even worse over fifty years ago. I wrote about this last year, but thought it was worth bringing up again. You see, BP was the main reason for Operation Ajax in 1953 aka the overthrow of the democratically-elected Iranian government.

The US went along with the plan, after the Dulles boys did a Red-scare number on President Eisenhower, making him think Iranian Prime Minister Mossadegh was going over to the Soviet Union. But before any of that happened, BP was the issue. Called the Anglo-Iranian Oil Company (AIOC), they basically screwed Iran out of most of their oil money. They negotiated a deal with a corrupt leader, and when more responsible Iranian leaders came into power and tried to renegotiate a fairer split of the money, AIOC/BP refused. Britain's initial request for an overthrow of the Iranian regime was denied by President Truman. Eisenhower wasn't really game, either. The US was disgusted at AIOC/BP - it was obvious the deal was unfair, and they wanted them to renegotiate. Eventually, the Dulles brothers resorted to fear of Communism (I think they really believed it, though classified records revealed since then show the threat wasn't that substantiated) to get the US to back Britain, and Mossadegh was overthrown by a team led by CIA operative Kermit Roosevelt Jr. (Teddy's grandson), and Mohammad Reza Pahlavi was put in power. Pahlavi, of course, is better known as "The Shah", the man whose ruthless rule, which the US backed, led to a major backlash in the 1970s that eventually led to the Iranian Revolution in 1979. So yeah, that didn't go so well for America.

At the center of all this was BP/AIOC. Their unwillingness to negotiate a fairer deal with Mossadegh led to all of this. Steve Kinzer has written quite a bit about this episode, most notably in his fantastic book All the Shah's Men. Here is a recent interview he gave on the topic. So, yeah, thanks a lot, BP. You're screwing America yet again. You can bet a lot of people in Iran are chuckling as they hear more about this situation in the Gulf of Mexico. They know all too well the destruction this oil company has wrought.

British Protroleum Ad from 1999: how prescient!

(Saw this on Calculated Risk)

Ewoks, Warfare, Alliances, and Modern Parallels (or: Stop Hating on Return of the Jedi)

Okay, so let me begin by stating that this post is a bit wacky. Even for me. The title by itself probably has most of you wondering what the hell is going on. This past weekend was the 30th anniversary of the release of the brilliant Star Wars sequel, The Empire Strikes Back. I love that movie, but it got me thinking about the following one (as did the continuous showings of the trilogy on TV - I can watch parts of the original Star Wars trilogy anytime), The Return of the Jedi (RotJ). This is a much-maligned movie that I actually always liked (not as much as Empire, of course) much more than most people. One of the common criticisms of Jedi was the presence of the Ewoks. Among sci-fi nerds, movie buffs, and the rest of us, the common criticism was: they're too damn cute. Having these koala-like cuddly things in the movie just killed it - you can't take it too seriously, and it was all an effort by George Lucas to get the kiddie dollar at the theater, the video store, and the toy store. Now, there's some truth to that - no doubt the Ewoks helped get more money from younger audiences. But, I think there's something much deeper to it. The Ewoks were not "cute" in the classic definition of cute. The Ewoks were victims of power politics, and were pretty courageous guerrilla warriors. Yeah, that's right. I said it. Stop hating on RotJ because of the Ewoks!

Let's review this. The Empire lands on the moon of Endor, the Ewoks home. They intrude on them and run operations on the planet. The second Death Star was built there, and the deflector shield for the infrastructure was based on the planet. So, while they weren't quite subject to an occupation, the Ewoks did have a foreign force run operations on their home planet. In other words, their sovereignty was taken away. Enter the Rebels. Under most circumstances, the Ewoks probably had no dog in the fight. However, they had foreign troops on their soil. The alliance with the Rebels was seemingly the only way to get out of this precarious situation, as they couldn't not align with a side here, like the states in the Non-Alignment Movement did during the Cold War. The Empire already violated their sovereignty, and they couldn't get that back on their own, so they needed to join with the Rebels. Thus, they had to choose sides. This isn't unlike many of the alliances formed during the Cold War, though in this case, the Ewoks had more in common with their ally, the Rebels, than did many allies during the Cold War. But the larger point is, they, like many of those states, didn't have a lot of real options.

The Empire's role in the Ewok story is not dissimilar from the controversial U.S.-led drone attacks in Pakistan, or the presence of the Guantanamo Bay detention center in Cuba. Neither are occupations, but both cause some serious sovereignty issues. The Empire wasn't (as far as I know) calling the shots on Endor. They didn't install a puppet Ewok regime. Yes, I know, this is getting a bit silly, but stay with me. However, the Ewoks were no longer able to fully function in their homes. If the area they needed to get crops from was being used by the Empire for the deflector shield, its not like they could negotiate with them over that. Even though it was their home, another party was exerting its sovereignty over the land. Just like Pakistanis don't support the U.S. drone attacks that have killed many innocent civilians (ratios vary, but no matter what, many more civilians have been killed than militants in these attacks) on their own soil, they can't really do anything about it. The Pakistani government is actually probably in cahoots with the U.S. on these attacks, or is at least looking the other way, while using oppositional rhetoric to ensure that Pakistanis think they're on their side on this issue (when they probably aren't). Fidel is most certainly not down with Gitmo, nor are most Cubans, but the U.S. keeps the base, where it has held hundreds of people at a time in legal limbo, and in a world of torture and degradation. Castro can't do anything about it. Just like the Ewoks.

So, they basically had limited options and were dragged into the conflict. Power politics came into play to some degree, though so did ideology - the Empire was never their kind of bag, while the Rebels were. Now, they were fuzzy and cute. But that plays into the more impressive part of the story that apolitical people don't get - they battled like crazy. This was David and Goliath - a 2 foot tall koala taking on armed 30 foot tall AT-ST walkers. That they did it was impressive enough, and says something about courage to do the right thing. Many died in what should have been an easy fight for the Empire to win. Of course, the Empire didn't win. The Ewoks and the Rebels won. They won with primitive weapons. They won through guerrilla warfare, not dissimilar to tactics made popular by Che Guevara. Even when the odds looked very bad, they kept fighting, and triumphed in the end. These primitive, cute, fuzzy things beat a technologically-advanced, far more powerful Imperial force. In fact, this was a huge thing for Lucas. He created the Ewoks for RotJ specifically to show this story. It was also not that long after Vietnam. I don't know for sure, but I wouldn't doubt that helped him shape the story.

So, the "cute" factor is important in RotJ, but it's to show that these cute, primitive underdogs can be particularly courageous and fight a far-superior Empire. It's to show that these cuddly little things can mount a strong resistance to Imperial forces which have impeded on their home. It's to show that the massively under-armed and under-manned Ewoks can win. By creating such a ridiculous underdog, Lucas actually shows us that we can all be strong enough to stand up against injustice, and that we might actually succeed.

In summary...the Ewoks are cute, sure, but they're cute so as to show us to struggle against injustice in the world. Because, hell, if those cuddly little Ewoks did it and succeeded, what's our excuse? Cute in RotJ isn't about cute, it's about courage, resistance, willpower, and success. Couple that with the theme of redemption (Vader's turn back to the Force, even though it kills him), and you've got a great movie. Probably the most political of the three original Star Wars movies - as I've made clear, there are parallels between the Ewok situation and alliance issues during the Cold War, guerrilla warfare tactics, the Vietnam War (considering the timing, I have to believe that played a major role in how the script was written), and sovereignty problems (like the drone attacks in Pakistan, and the presence of Guantanamo Bay in Castro's Cuba). Is that to say RotJ is exactly like any of the above? Not exactly. But the fact that the Ewok subplot has so many similarities to these serious political issues says something. Namely, even though it may not be as good a movie as Empire, RotJ is a damn good movie, and particularly because of the Ewoks' struggles and eventual triumph. So stop hating!

Interview with Eric Spott About Economies Around the World

Awesome interview on BNN with Eric Sprott, chairman and CEO, Sprott Asset Management explaining his view and research concerning the World's biggest economies (China, US, and Europe) talking specifically about the Flash Crash that I wrote about a few weeks ago. He's a very articulate speaker and really does a good job bringing some very complicated topics down to earth. A Must watch!

http://watch.bnn.ca/#clip304447

Chinese Artists Imprisoned -- Please Share

An artist friend of mine whom I met at the Vermont Studio Center Residency Program just sent this to me. I find it to be quite disturbing and encourage you to spread the word and, if you are so inclined, to write to the appropriate ambassadors (contact information below).

--
Dear Friends,

I recently came across a catalogue for an exhibition called “Embracing the Uncarved Wood,” which Artistsfeatures some amazing hand-carved sculptural reliefs by a group of deaf sculptors from China. I read that these artists had formed a collective called the “True Words Workshop,” where they lived and worked together under the direction of two hearing teachers, Zhou Ning and Xiao Yixia, who are graduates of the Shandong Art Institute.

I wanted to learn more so I Googled them and what I’ve found out is extremely disturbing. Two years ago, Zhou Ning was arrested and last March he was sentenced to five years in prison. Both Zhou Ning and Xiao Yixia had already been subjected to repeated harassment, having been evicted from their house and having been arrested and imprisoned several times before. Their defense lawyer, Li Subin, who specializes in human rights cases, has suffered as well: his law firm has been closed down.

Apparently these two artists are practitioners of Falun Gong, a sort of philosophical mix of qi gong, Buddhism, Taoism and Confucianism. The Chinese government has outlawed it, along with many other non-approved belief systems. Amnesty International has condemned China’s treatment of Falun Gong prisoners, as has our own government.

I hear about political prisoners all the time, but since Zhou Ning is a fellow artist, I feel particularly connected to his case. I am asking you to take a moment to write letters or emails to the following people. Compose your own or, if it makes it easier, you can use what I’ve drafted below.

And please forward this to as many artists [and concerned individuals] as you can.

---------------------------------------------

Ambassador Jon Huntsman
United States Embassy
Number 55 An Jia Lou Lu
Beijing, China 100600
Email: AmCitBeijing@state.gov

Charlotte Oldham-Moore, Staff Director
Congressional Executive Commission on China
243 Ford House Office Building
Washington, DC 20515
Email: charlotte.oldham-moore@mail.house.gov (with a cc to the Director of the Prisoner database: steve.marshall@mail.house.gov )

Vanessa Jalet, Executive Assistant to Linda Downs
College Art Association
275 Seventh Avenue, 18th Floor
New York, NY 10001
Email: vjalet@collegeart.org (with a cc to Paul Jaskot, President, Board of Directors: pjaskot@depaul.edu)

From the Back of the Pack: Nissan Upsets Rivals with New 100% Electric Vehicle

The Potential Economic Impact of an Evolving Industry

More than 47,000 Zero Emissions Nissan Leaf electric cars have reportedly been pre-ordered from the company(source: a phone call to their PR office made on May 19, 2010), and the first model of the Leaf was only recently revealed at the 2010 Detroit Auto Show (which took place in August of last year). The car is not even due to arrive on the market until December, so this incredible backlog is most likely indicative of major delivery delays as the August, 2009 edition of BusinessWeek indicated the company’s production capacity at that time would only allow them to make 12,000 cars by March. (the site for the car is here: http://www.nissan-zeroemission.com/EN/LEAF/)

The Leaf promises gas-independent driving and the ability to travel as far as 100 miles on a single charge. What's more, it can be fully charged for a total cost of roughly $2.75. The car uses a series of lithium-ion batteries for charging--these are the same kind of batteries as those used for charging most cell phones and laptops.

For those concerned about performance, Nissan claims the Leaf can reach speeds of 90 mph.

Nissan is still unclear about the availability of planned public charging stations, which would be necessary for trips longer than 100 miles since the car does not come with a gas tank, however they indicate that the car can be fully charged at various time intervals from both a standard 110V outlet and through super-charging kits that would speed up the process greatly.

The company is looking into ways to increase production, in order to roll out more cars in early 2011. It will have competition in the electric car market from the Chevrolet Volt and the Toyota Prius Plug-in Hybrid, but the Volt only promises 40 miles on one charge and Prius has not yet revealed its mileage. What is most surprising, however, is that much of the limelight had been given to the Volt and the Plug-in Hybrid during the run-up to this key moment in the automobile industry.

Nonetheless, I make three important observations from the development of the Leaf and its brethren as it pertains to the industry and to the current greater flailing economy: First and foremost, it is incredible that in the midst of the kind of economic turmoil we are experiencing right now, that an industry exists that cannot keep up with demand. Our governments (worldwide), remain focused on the symptoms of an infected economy instead of the economic patient itself. Our political leaders have an opportunity to help create and/or stimulate the creation of millions of jobs through the advances provided us in both the auto market itself as well as peripheral markets that will necessarily build off the advancement of such a huge industry. With stated unemployment in the US around 10% (effective unemployment closer to 18-20%), expectations of deflation and wage stagnation, a sour real-estate market, serious credit concerns and all the other headwinds facing world economies, is the insatiable backlog facing Nissan (and presumably other electric car makers) not a beautiful silver lining of an otherwise dark and stormy cloud? Can we not see the potential applications of this new technology constructively impacting other industries? Why is our government patching up gaping wounds (high unemployment) with expensive band-aids (extending the unemployment benefits for a third time) to the tune of 60 billion dilutive American dollars when the real problem is that those who still haven't found a job after 37 weeks are either waiting for an industry to come back that may be dead and gone forever, or simply do not have a set of skills that are appreciable in our modern economy. All of the money our government is doling out to appease a disgruntled part of society, dissolutioned by the inability to provide for their families and participate in the progress of their species, is being taken from those who have skills and are still working. What's worse is that this path to governing is completely unsustainable and as a society we are very near a tipping point. A program or series of programs targeting skill-building will inevitably be needed if we are to escape this mess intact and the only feasible area where such an investment will have a long-term positive return is in an industry that is growing in importance and evolving the way we live. Progress, itself, is the best and most sustainable motivation. Electric transit and sustainable energy storage and are a viable option (though not the only one).

A second and connected observation I have made deals with the lithium-ion batteries themselves. Actually, it is more a concern than an observation. Having witnessed the evolution of lithium-ion batteries in cell phones and laptops, it is clear that the technology has incredible promise. However, it is also clear that we have still not managed to perfect the technology. My MacbookPro, which I bought two years ago, only remains charged for about a tenth of what it did when I first bought it. In fact, the short duration has lead me me to use the laptop much more like a desktop in that I never unplug it anymore. Such an option will not be viable for electric cars for obvious reasons. One might say, just buy another battery. Okay... sure. Well actually, it will be a sleeve of batteries (think about changing 3 or 4 Duracell batteries from a Magnum Flashlight. But the cost of lithium-ion batteries is not going to be the hundred or so dollars one might expect to pay for a lead-acid battery. It will end up costing you somewhere between $3000 and $8000 dollars "for parts and labor." This is an important consideration in and of itself. But one must also consider the fact that these batteries also depend on a raw material that as of yet seems to be in large enough supply to support demand. What happens though, when they become the standard? Will we then be replacing one sacred raw material (oil) for another (lithium)? Of course, the electricity itself has to come from somewhere too, and unfortunately we have yet to fully incorporate enough renewable clean energy to replace oil. Yet, that last point is directly related to my earlier observation about the government directing all their (cough, cough) "healing powers" at the wrong areas of our economy.

One last observation I have made relates not so much to the electric or hybrid component of the cars themselves, but to their size. I suppose it is inevitable that cars should get smaller, certainly in the US there is a glut of unnecessarily large vehicles. However, I cannot help but wonder what the automobile landscape will look like in 10-15 years. Its quite exciting.

Pay No Attention to the Oil behind the Curtain: the Cheney Administration's Perfect Execution

Behind the excitement associated with the debt concerns of various countries in Europe, allegations of fraud against certain Wall Street titans, the over-heating of the Chinese real-estate market, and of course the record price of gold, there remains a tedious War Against Terror, that has finally dragged on long enough for the majority of ADHD Nation to stop paying attention. Meanwhile, it seems the success of the oil auction in Iraq early last year was timed perfectly, creating a windfall for American oil services companies Halliburton (HAL), Schlumberger (SLB), et. al., just before the market cycle begins to thaw and the stronger dollar begins to deplete the market-exchange value of oil (crude is hovering around $76, down from $87 two weeks ago). Having committed to a drilling backlog of 2,500-3,000 new wells per year for each of the next six years as well as to the development and maintenance of the pipeline and shipping terminal infrastructure that will support this massive number of new wells that will be coming online throughout this time period, it appears that the Chaney administration will have indeed succeeded in making Iraq the world’s largest oil exporter (not to mention putting a solid revenue stream in Halliburton's back pocket). The total value of these contracts may reach as much as $60 billion over the next six years, generating $1 billion in new revenues for each company per year.

Two offshore terminals are currently under construction already (first reported here back in 2009), and another two are scheduled to begin by 2013. Upon completion of all four, oil production in the country will go from the current 2.5 million barrels a day to an awesome 12 million barrels per day by 2016. [Official EIA list of top oil producing countries as of 2008]

Iraq’s oil production peaked at 3 million barrels per day in 1979, and then dropped dramatically after it invaded Iran. Saddam did very little to help the ailing situation thereafter, sucking and stealing what little financial nutrient remained from the teet of the severely broken oil fields at the expense of his own people. Year-end earnings reports from every oil engineering company involved in the region reported dismay at just how poor the state of Iraq’s energy infrastructure is after 40 years of neglect, essentially proclaiming that it all has to be rebuilt from scratch. Granted, I try to keep these proclamations in perspective—after all, common sense tells us not to ask a barber if he thinks you need a haircut. Nonetheless, SEC regulations do not permit falsification of facts of any kind in financial statements, and this is one area of government that is fairly well regulated. In the end, if the new Iraqi government can provide the necessary infrastructure (or at least the funding for American and European companies to build it) and political stability necessary to turn Iraq into another Saudi Arabia, we could very well be witnessing one of the largest changes to international trade in a great number of years as it will dump an incredible supply of oil onto the market, essentially putting a long-term cap on dollar denominated oil prices.

Flashback 8 years, and we can see why anti-war activists were the only voices confronting the feeble and unconvincing arguments that were allegedly holding up the United States’ declaration of war and the right to invade Iraq. Early in the planning of the war there was near-open discussion about the US’s ability to reclaim the cost of the war using newly freed oil exports; hence, Iraq’s oil fields were never targeted during either gulf war—well, at least not by the US.

Could it be that much of this philandering stock market entertainment and even the BP oil spill off the US coast is really just a big sideshow meant to distract us from the significant events taking place in the background? Come to think of it, back in 2002 wasn't Saddam Hussein threatening to begin only dealing Iraqi oil in Euro? Funny the Euro is imploding as I write this, down to 1.23354 from an intermediate high of 1.5141 four months ago. It seems the pieces are just falling into place. If I were rooting for the oil mongers and pandering politicos, I might be inclined to say "well done sir! Talk about planning to perfection."

Already a House of Cards, Europe piles on €1 Trillion more worth of debt

Just a quick follow up to my post yesterday regarding "Europe Engaged in 25 Hour Rescue of the Markets," it turns out that the initial amount of €560 was deemed "simply not enough" by some at the Euro Zone bargaining table last evening. The announcement came out at 3:20am (Belgium time) and it immediately pushed the futures up in the US by 2% and the Euro up 2.8% against the dollar. By the time I went to bed, futures were up nearly 3%, and the Euro steadied at $1.29. Six and a half hours later, when I awoke, to the surprise of many I am sure, the futures were up a whopping 4.7% and the Euro had reached $1.31 from just $1.25 12 hours earlier.

The UK Telegraph has a great article that explains some of the more obvious inevitable ramifications. I'll let our readers decide, however, some of the more subtle events that could transpire by the time this all comes home to roost. Indeed, I would love to get some feedback, as all this "government assistance" has risen to the point where it is now well over my head. Regardless, I sure hope the short-term gains of the few are worth it for the long-term pain we are all going to feel if this "ALL-IN" shove doesn't work. It has been said that the US bank bailouts were sending good money after bad. When we create €1,000,000,000,000 out of thin air I start questioning whether or not the money we are sending after bad qualifies as "good."

Hey Billy, can you kick the can this time, I have to spit.

The Bell Curve & Charter Schools: The Not So Odd Couple

Yesterday the NYTimes ran an interesting Op-Ed piece on Charter Schools by Charles Murray entitled, "Why Charter Schools Fail the Test." I read through it quickly and thought it to be arguing two main things: standardized tests were weak measures and that school choice was a democratic right. Both of these things meshed well with my ideology and then I arrived to the bi-line and read Charles Murray. I froze, kept reading and sure enough it was the Charles Murray. Murray's name not ringing a bell? Well Murray was one of two authors of the uber-controversial book The Bell Curve. The Bell Curve, of course, ultimately argued that there were racial differences in intelligence, no matter how you "sliced the pie." So this may lead one to wonder, "Why or how on earth would Murray be writing about Charter schools and supporting them?" Well to answer that you have to understand his back story.

The Bell Curve's most controversial chapters (13 and 14) really drove home their message that intelligence (g-factor) was more prevalent among certain racial groups and lower among others. Rightfully so, many top scientists rose up to strike down the Bell Curve's thinly veiled statements of racial superiority and inferiority. The Bell Curve was not Murray's first set of handiwork, he is often regarded as the man who dismantled the welfare system. In Losing Ground, he essentially argued that the welfare system enabled bad behaviors and used national dollars to invest in the entrenchment of poverty. This argument, I often hear parroted by people, the catch is a great deal of research carefully demonstrates the contrary (please see any of William Julius Wilson's or Sheldon Danziger's bevy of books on the subject). The common sensical nature of Murray's argument have allowed him to stay around and advance arguments that dance along and get close to idea of eugenics (the science of "bettering humans" usually by "trimming the gene pool" -this was one of Hitler's goals during the Jewish Holocaust).

Murray in the editorial takes a step back to the question of education which he addressed in Real Education a couple of years ago. I admittedly could not stomach the whole book as he argued "four simple truths": 1) ability varies, 2) half of america's children are below average, 3) too many people are going to college and 4) America's future relies on how we educate the academically gifted. They seem benign enough, right? Well put them together with his past work and you get a neat line of logic suggest (my interpretation):

Ability levels vary, so not all kids are going to do well, in fact half of kids are poor students, the other half are doing okay. So of the half that is okay, there's really about 10 percent that should be going to college and let's invest in those 10 percent rather than investing in the other 90 percent.

Still not seeing why it connects to the Bell Curve. If you asked Murray, what do the races of the top 10 percent look like? He'd honest respond earnestly and with his "scientific evidence" to say they're majority White. Ah, do you see it now? The folks at the top are White and should be invested in, the folks at the bottom are non-White and shouldn't be getting all those "hand-outs" and "special programming."

Murray has been consistently attacked for this type of reasoning, so charter schools mark a quaint respite for his ideas. He points to the Milwaukee evidence that demonstrated that charter school and traditional public schools performed roughly equal. He suggests that home environment means a great deal for intelligence ( he doesn't think standardized tests measure intelligence (g-factor) so they're a weak measure) and school thus can do little to shift what students walk in. He, like many mis-readers of the Coleman Report, suggest schools CAN DO little, when Coleman actually argued schools DID DO little to affect student achievement. For Murray, choice is good because you no longer have to suggest that poor people get few options. In fact, charters are cheaper on state's to operate and offer the basic democratic right of choice. He'd likely concede that we shouldn't expect these schools to do anything for the children who are part of the deeply impoverished and severely unintelligent (this is his reasoning not mine).

In the end, you get a well crafted Op-Ed that says, "despite lack of success Charter schools are good." But what operates behind the veil matters the most! His piece is animated by a lack of belief in the students within these schools and he doesn't think schools can to move these youth towards prosperity intellectually, socially or materially. While I'm neither a fan nor hater of charter schools, I realized that who is in your camp matters. Murray's commentary reminds me of the adage, "Everyone on the sidelines is not cheering for you." The question is, are we savvy enough to know who is for us and against us?

European Union Engaged in 25th Hour Rescue of the Markets: Obama Overseas to Show US Solidarity with Europe Against Speculators

Wow, its a busy day for political-economic news. This time I get to report about stuff being published in real-time Germany. Note* in most of Europe right now it is nearly midnight so these are not ordinary proceedings. Having lived in Germany from 2007-2008, I picked up enough German to be able to provide you with a translation of a just released announcement of a coordinated move on the part of the 16 member block of European countries that share the Euro as a common currency. Apparently, the euro countries want to defend their common currency against speculators with an aid package amounting to €560 billion against speculators. The EU countries are rumored to be putting finishing details on the program, which should be announced on Monday morning (a live webcast in English should be available at http://video.consilium.europa.eu/index.php?pl=&sessionno=2899&lang=EN when the time comes). Either way, I'm expecting it shall happen before the opening of financial markets in an effort to provide some stability (in reality it will probably only cause a short-covering rally if anything at all). According to the German article, it appears that the initial package, which will be given directly to the European Commission, will be for €60 billion, however, in the end they expect up to €350Billion to come from the European Union and €150 to come from the International Monetary Fund. (roughly translated) "The point is," according to comments made by the Swedish Finance Minister, "the Euro is being attacked by a pack of wolves, speculators, who will 'break' the weaker European countries, if they are not stopped." He goes on to delineate "the next potential victims of speculation are Portugal, Spain and possibly Italy. They are testing the Euro Zone's ability to provide an appropriate response."

Apparently, at least according to the aforementioned source, President Obama is overseas and engaged in these last minute arrangements as well.

My thoughts on the matter? All this is well and good, but the stock market is up 78% from its March 2009 lows, and was up as high as 89% before the recent weakness in the market came to roost. Why is it, then, that when the market is out of control to the upside we say "the market is healthy, hurray, hurray! Look at all the good our administration has done." Yet, when the market begins to correct and acknowledges it's over-extended state, suddenly speculators are at fault? Be careful folks. Just as I stated in my earlier post today, when the government meddles in the market, there can be powerful unforeseen consequences that cannot be quickly retracted. If, in fact, this sovereign debt bail-out goes through, watch gold. Gold, as over-extended as it seems to be, it will continue to reach new highs as long as Government's continue to dilute the purchasing power of their currencies.

Department of Justice and Commodities Futures Trade Commission go After JPMorgan for Alleged Silver Price Manipulation

Three weeks ago it was Goldman Sachs that was in the government hot seat, when they were charged with deceiving clients by selling them mortgage securities secretly designed to fail by a hedge-fund firm run by John Paulson, who in turn made a killing betting against the same securities packages he was selling as the housing market collapsed. It would seem, as of this morning, however, that Goldman now gets to share the throne (and not the one these so-called masters of the universe are used to sharing) with non other than JPMorgan.

The New York Post's Michael Gray, who is--as far as I know--the first to report on this issue, broke the story this morning:

"Federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals market.... The probes are centering on whether or not JPMorgan, a top derivatives holder in precious metals, acted improperly to depress the price of silver, sources said. The Commodities Futures Trade Commission is looking into civil charges, and the Department of Justice's Antitrust Division is handling the criminal probe, according to sources, who did not wish to be identified due to the sensitive nature of the information.

Apparently these probes are far-ranging and far-reaching, with federal officials investigating a number of traders at JPMorgan and looking into JPMorgan's precious metals activities on both the London Bullion Market Association's (LBMA) exchange, as well as the New York Mercantile Exchange (Nymex), which focuses on future paper derivative trades.

As Gray explains the details of the allegations
, "JPMorgan increased its silver derivative holdings by $6.76 billion, or about 220 million ounces, during the last three months of 2009, according to the Office of Comptroller of the Currency." This information is rather suspicious in light of earlier allegations related to JPMorgan's involvement in suppressing the price of silver by "shorting" the precious metal in tandem with the release of news announcements that were extremely positive and therefore should have, by all accounts, sent the price of silver upwards.

Gray goes on to explain:

Last week, The Post got a telling e-mail the Justice Dept. sent to a concerned investor. "Thank you for your e-mail regarding allegations that JPMorgan Chase, and perhaps other traders, are manipulating the silver futures market," the e-mail read.

Of course, what makes the email most telling is that supposedly the concerned investor's e-mail to the Justice's Anti-trust division never actually mentioned any companies or traders in particular.

Much of the details pertaining to the case is still a little unclear as it is only now leaking out to the masses. On a personal note, however, one thing I am a bit concerned about is the leverage that these coincidental allegations against the big banks gives the government. Now do not get me wrong, I am not in any way defending the HB&B's, but the expression "better to deal with the devil you know than the one you don't" comes to mind. I do not think any government, US or other, truly understands on the whole how intractable many of their well-intended reforms are. Even those individual members of congress who truly believe that they are "doing good for the people" are seldom aware of the ramifications of their meddling with market forces. For example (and I expect to write more on this matter later in the week) Basel 3 is expected to be adopted later this year and one certain mandate that will come with adoption of the doctrine will be an increase in the obligatory margin of capital banks and brokers will be expected to have on hand at all times. On the surface, this measure will be a positive and necessary move that should (and in the long-term probably will) make the marketplace and the larger economy safer and more resilient. However, behind the scenes what it amounts to is forceful capital raising on the part of banks across the board. Where will that money come from? Some of it can potentially come from organic growth, but not all of it, especially since organic growth in the markets takes time and they will not likely be granted a whole lot of time to reach their new margin levels. The remainder will have to come from public and and private borrowings and asset sales. Either way, all three of these sources will put downward pressure on the stock market and the greater economy as money funnels into the bank's coffers and I'm not sure the short-term consequences of such an agreement are accounted for. Then again, that's probably why there is a "3" after Basel to begin with.

English Translation of Property Rights Law of the People’s Republic of China (2007): PART I: General Provisions

If you have not already done so, please note the disclaimer on the introduction page to this post before reading.
Click on "Read More" below to access Part I of Property Rights Law of the People’s Republic of China.

Click Table of Contents for a bulleted outline of the details that can be found under each part of the recently passed law.

PART I GENERAL PROVISIONS

Chapter I Fundamental Principle

Article 1
This Law is formulated with a view to maintaining the national basic economic system and the economic order of the socialist market, clarifying the ownership of property, giving full effect to the meaning of property, protecting the obligee’s property ownership rights, in accordance with the Constitution.
Article 2
This Law shall apply to civil relationship arising from the ownership and utilization of property.
The word “property” as a term used in this Law includes movable and real property. Where there are laws stipulating rights as the objects of property rights, they shall be observed.
The phrase “property rights” as a term used in this Law refers to the exclusive right enjoyed by the obligee to directly control specific properties including ownership, usufructuary and security right in property rights.
Article 3
During the primary stage of socialism, the State shall adhere to the basic economic system, with public ownership playing a dominant role and diverse forms of ownership developing side by side.
The State shall consolidate and develop unswervingly the public sector of the economy and at the same time encourage, support and guide the development of the non-public sectors of the economy.
The State implements the socialist market economy, ensuring equal legal status and right for development of all market players.
Article 4
The property rights of the State, collective, individual and other obligees shall be protected by laws and shall not be infringed by any institute or individuals.
Article 5
The types and content of property rights shall be stipulated by laws.
Article 6
The establishment, modification, transfer and lapse of the right in real property shall be registered in accordance with relevant laws and regulations. The establishment and transfer of the movable property shall be delivered pursuant to laws and regulations.
Article 7
The attainment and exercise of property rights shall comply with laws, social morality and shall not do harm to the public interests and the legitimate rights and interests of others.
Article 8
Where there are laws stipulated otherwise in respect of property rights, such laws shall be observed.

Chapter II Establishment, Modification, Transfer and Lapse of the Property Right

Section I Real Property Registry

Article 9
Unless otherwise provided by law, the establishment, modification, transfer and lapse of the right in real property shall only take effect upon registration pursuant to laws.
The ownership with regard to State-owned natural resources might not be registered.
Article 10
The real property shall be registered in the registration department of the place where it is located.
With regard to real property, the State pursues a uniformed registration system, of which the scope, departments and methods shall be stipulated by laws and administrative regulations.
Article 11
While applying for registration, the party interested shall provide evidentiary materials showing the ownership as well as other necessary materials specifying the site and size of the real property.
Article 12
The registration department shall perform such duties as stated below:
(i) Check and examine the evidentiary materials showing the ownership and other necessary materials submitted by the applicant;
(ii) Raise inquiries to the applicant in respect of the registration;
(iii) Conduct registration according to facts and in a timely manner;
(iv) Other duties provided by laws and administrative regulations;
In the event where further evidence is needed in respect of relevant items of the real property to be registered, the registration department may require the applicant to provide supplementary materials and conduct field survey if necessary.
Article 13
The registration department shall not conduct any of the following:
(i) Require evaluation with regard to the real property;
(ii) Require repetitive registration in the name of annual inspection;
(iii) Other actions beyond the scope of registration authority.
Article 14
The establishment, modification, transfer and lapse of right in real property, which is required to be registered, shall take effect upon being registered.
Article 15
The contract entered into by interested parties in respect of the establishment, modification, transfer and lapse of the right in real property shall take effect immediately upon execution thereof unless otherwise provided by law or in the said contract. The validity of the contract shall not be affected if the registration in respect of the right in property is not carried out.
Article 16
The Real Property Register shall be the basis of evidence pertaining to the ownership and content of the property rights and shall be supervised by the registration department.
Article 17
The ownership certificate of real property is the evidentiary material showing the rightful ownership of the obligee in such real property. Items recorded in the ownership certificate of real property shall be in conformity with that registered in the registration certificate, otherwise, the real property registration certificate shall apply.
Article 18
The registration department shall provide assistance to the obligee and interested party to review and make a copy of the registration information.
Article 19
Where the obligee, interested party considers items recorded in the real property register had been wrongly entered, may apply for correction of the registration. In the event that the obligee of the real property register agrees with the correction in writing or have evidences to prove the existence of the mistakes with regard to the registration, the registration department shall make relevant corrections.
In the event that the obligee of the real property register does not agree with the correction, the interested party may apply to oppose to the registration. Where the opposition registration is approved by the registration department, the applicant may bring a suit to a court within fifteen (15) days from the date of registration of such opposition, failing which such opposition registration shall become invalid. When the obligee suffers from inappropriate opposition registration, the obligee may claim damages from the applicant.
Article 20
Where concerned parties reach an agreement pertaining to purchase or sale of a house or other real properties, it may, in order to ensure realization of property rights, apply for pre-notice registration with the relevant registration department in accordance with the agreement. Upon completion of the pre-notice registration, the disposal of such real property without consent from the obligee of the pre-notice registration shall not take effect with regard to property rights.
Upon the registration of the pre-notice, the creditor’s rights lapses or within three (3) months from the date on which such registration can be registered, but fails to apply for registration of real property within, the pre-notice registration shall become null and void.
Article 21
The party concerned shall, if providing false materials for registration that does harm to others, bear the responsibility for compensation.
Where the registration department brings damage to others as a result of mistakes in registration, it shall bear the responsibility for compensation and shall have the right of recourse to the person who is liable for such mistake.
Article 22
The registration of real property shall be charged according to the quantity and may not be charged according to the size, volume or price of the real property. Specific charge standard shall be jointly stipulated by relevant department of the State Council and the competent department in charge of pricing.

Section II Delivery of Movable Property

Article 23
Unless otherwise provided by law, the establishment and transfer of the right in movable property shall take effect upon delivery.
Article 24
The establishment, modification, transfer and lapse of the right to property in respect of water-crafts, aero-crafts and motor vehicles without first being registered, shall not affect any bona fide third party.
Article 25
Where the obligee has already in possession of the movable property before the establishment, transfer of the right in such movable property, the property rights shall become effective upon the validity of the legal action.
Article 26
Where a third party has been in possession of the movable property before the establishment, transfer of the right to such movable property, the delivery of such movable property right may be replaced by transfer of the right to request the third party to return the property by the person entitled with the delivery obligation.
Article 27
The assignor shall deliver the movable property to the assignee in case of an assignment of the right to such movable property, provided, however, that both parties agree on a continuous possession of such movable property by the assignor, the right to property shall take effect upon the validity of such agreement.

Section III Miscellaneous

Article 28
The establishment, modification, transfer and lapse of the property rights as a result of the legal amanuensis of the people’s court and the arbitration commission, the expropriation decision of the people’s government shall become effective upon the effective date of such legal amanuensis or expropriation decision of the people’s government.
Article 29
The property rights obtained as a result of inheritance or acceptance of donation shall take effect upon the commencement of the inheritance or the donation.
Article 30
The establishment or lapse of property rights due to such actual actions as legal construction and demolition of houses shall become valid and effective upon the occurrence of such actions.
Article 31
The disposal of such property rights as enjoyed pursuant to the provisions of Article 28 to Article 30 hereof shall not become effective in respect of the property rights if not being registered, provided that such disposal needs to be registered.

Chapter III Protection of the Property rights

Article 32
Where the property rights are infringed, the obligee may handle the problem through such means as pacification, mediation, arbitration or litigation.
Article 33
In case that disputes arise in respect of the ownership and content of the property rights, the interested party may request affirmation of such right.
Article 34
Where the real property or movable property is possessed by people without rights, the obligee shall have the right to request return of such property.
Article 35
Where the property rights are infringed or likely to be infringed, the obligee may request to remove such encumbrance or hazard.
Article 36
Where the real property or movable property is damaged, the obligee may request repairs, remake, replacement or restoration.
Article 37
Where the obligee suffers from infringement done to the property rights, it may claim damages and request the infringing party to bear other civil liabilities.
Article 38
The methods with regard to the protection of the property rights provided in this chapter may be used separately or jointly according to specific circumstances of the infringement of the right.
Where the infringement of the property rights violates administrative regulations, the infringing party shall, in compliance with laws, assume the administrative liability, in addition to the civil liability; if such infringement constitutes a crime, the party concerned shall be investigated for criminal responsibility in accordance with law.

Go to:

Table of Contents

Part I: GENERAL PROVISIONS

Part II: OWNERSHIP

Part III: USUFRUCTUARY RIGHTS

Part IV: SECURITY INTEREST IN PROPERTY RIGHTS

Part V: POSSESSION

English Translation of Property Rights Law of the People’s Republic of China (2007): PART V: Possession

If you have not already done so, please note the disclaimer on the introduction page to this post before reading.
Click on "Read More" below to access Part V of Property Rights Law of the People’s Republic of China.

Click Table of Contents for a bulleted outline of the details that can be found under each part of the recently passed law.

PART V: POSSESSION

Chapter XIX Possession

Article 241
In the event of possession arising from contractual relationship, the use, benefits and breach liabilities of relevant real property and/or movable property shall be subject to the terms and conditions of contract. In the absence of such contract or in the event of ambiguous terms and conditions thereof, other relevant laws shall apply.
Article 242
Where the possessor causes any damage to the real or movable property due to his use of such property, the mala fide possessor shall bear compensation and liability.
Article 243
Where the real or movable property is possessed, the relevant right holder may request return of the original item together with any harvest thereof. A bona fide possessor may deduct necessary expenses for maintenance of such property.
Article 244
Where the real or movable property is damaged or lost and the relevant right holder requests compensation, the possessor shall return the insurance, damages or any compensation fee to the right holder. Where the losses are not fully recovered by the compensation, mala fide possessor shall further make up for the deficiency except to the extent that he was at no fault with regards to the occurrence of the damage.
Article 245
Where the real or movable property is seized by the use of force, the possessor shall have the right to request return of the original property. In the event of any obstruction to the possession, the possessor shall have the right to eliminate the obstruction. In the event of any damage incurred from the seizure or obstruction, the possessor shall have the right to compensation.
The right of request for return of the original property shall lapse if the possessor has not exercised his right within one year of the date of seizure.

Supplementary Provision

Article 246
Prior to the release of any law and administrative regulations on the scope of real property registration, registration authority and relevant registration methods, relevant local regulations may be formulated by reference to this Law by local People’s Congress and its Standing Committee.
Article 247
This Law shall take effect as of October 1, 2007.

Go to:

Table of Contents

Part I: GENERAL PROVISIONS

Part II: OWNERSHIP

Part III: USUFRUCTUARY RIGHTS

Part IV: SECURITY INTEREST IN PROPERTY RIGHTS

Part V: POSSESSION

English Translation of Property Rights Law of the People’s Republic of China (2007): PART IV: Security Interest In Property Rights

If you have not already done so, please note the disclaimer on the introduction page to this post before reading.
Click on "Read More" below to access Part IV of Property Rights Law of the People’s Republic of China.

Click Table of Contents for a bulleted outline of the details that can be found under each part of the recently passed law.

PART IV Security Interest In Property Rights

Chapter XV General Stipulations

Article 170
Unless otherwise stipulated by laws, holder of security interest shall have priority in satisfying its claim if a debtor defaults in its obligations.
Article 171
If any guarantee is necessary for the creditor to enforce its claim in civil activities like accommodation of funds and the circulation of commodities, security interest may be provided in accordance with this Law and other laws.
Where a third party provides a guarantee to a creditor for a debtor, the third party may require the debtor to provide him with a counter-guarantee. The provisions on guarantee in this Law and other laws shall apply to the counter-guarantee.
Article 172
When the security interest is provided, a guarantee contract should be entered into in accordance with this Law and other laws. A guarantee contract is an ancillary contract of the principal contract. If the principal contract is null and void, the guarantee contract shall be null and void accordingly, unless otherwise stipulated by laws. .
If a guarantee contract is determined to be null and void, the debtor, the guarantor or the creditor who is in default shall bear civil liability according to their respective fault.
Article 173
The scope of security interest covers principal creditor's right and its interest, penalty, liquidated damages and expenses for storage of pledged assets and enforcement of security interests, unless otherwise agreed in the contract.
Article 174
In case of destruction, loss and requisition of the mortgaged property during the period of the surety-ship, the holder of security interest shall have priority in satisfying his claim from the guarantee fund, compensation money or compensatory amounts. The holder of security interest may also have such guarantee fund, compensation money or compensatory amounts deposited when the time limit for the performance of the security interest does not expire.
Article 175
Where a third party provides a guarantee to creditor for a debtor, if the creditor permits the debtor to transfer its debt without written consent of such third person, the guarantor shall not undertake surety-ship liability.
Article 176
Where there are both surety-ship and property security for the same claim, the creditor shall enforce its claim according to the agreement if the debtor fails to perform its debt; in the absence of an agreed or explicitly agreed mode of surety-ship, if the debtor provides the property security, the creditor shall enforce its claim from such property security; where a third person provide the property security, the creditor may enforce its claim from such property security or request the guarantor to undertake surety-ship liability. The third person that has undertaken the surety-ship liability shall have the right of recourse against the debtor.
Article 177
The security interest shall lapse under any of following circumstances:
(i) The principal debt lapses,
(ii) The security interest is enforced;
(iii) The creditor waive the security interest;
(iv) Other circumstances provided by law under which the security interest lapses.
Article 178
In case of any discrepancy between the Guarantee Law of the People’s Republic of China and this Law, this Law shall prevail.

Chapter XVI Right to Mortgage

Section 1 General Mortgage Right

Article 179
Where a debtor or a third party, for performance of the mortgaged debt, secures the creditor's rights with property without transference of its possession, if the debtor defaults, the creditor shall have priority in satisfying his claim from such property;
The debtor or the third party specified in the preceding paragraph is the mortgagor; the creditor is the mortgagee, and the property provided as security is the mortgaged property.
Article 180
The following property which the creditor or third person is entitled to dispose of may be mortgaged:
(i) Houses and other things firmly fixed on the land;
(ii) Land use right to building lot;
(iii) The land-use right to barren land contracted by the mortgagor by way of bidding, auction and discussion;
(iv) Production equipment, raw materials, semi-finished products and finished products;
(v) Buildings, ships and aircrafts under construction;
(vi) Means of transportation;
(vii) Other property that may be mortgaged according to law and administrative rules.
A mortgagor may at the same time mortgage all the property listed in the preceding paragraph.
Article 181
Enterprises, small business of industry and commerce and rural contractors may mortgage their existing and future production equipment, raw materials, semi-finished products and finished products according to the agreement between the parties, if the debtor defaults, the creditor shall have priority in satisfying his claim from such property.

Article 182
Where houses are mortgaged, the land use right to the construction lot occupied by the houses shall be mortgaged at the same time. Where the land use right to the construction lot is mortgaged, the houses fixed on the land shall be mortgaged at same time.
If the mortgagor fails to comply with the preceding paragraph, property not mortgaged shall be deemed as mortgaged at the same time.
Article 183
The land-use right to the land used by a township (town) or village enterprise may not be mortgaged separately. Where factories and other buildings of township (town) or village enterprises are mortgaged, the land-use right to the land occupied by such buildings shall be mortgaged at the same time.
Article 184
The following property may not be mortgaged:

(i) Ownership of the land;
(ii) Land-use right to the land owned by the collectives such as cultivated land, house sites, private plots and private hills, with the exception of those provided by law;
(iii) Educational facilities, medical and health facilities of schools, kindergartens, hospitals and other institutions or public organizations established in the interest of the public and other facilities in the service of public welfare;
(iv) Property in relation to which the ownership or the right of use is unknown or disputed;
(v) Property sealed up, distrained or placed under surveillance in accordance with law; or
(vi) Other property which may not be mortgaged as prescribed by law.

Article 185
A mortgagor and a mortgagee shall conclude a mortgage contract in writing.
A mortgage contract shall include the following particulars:
(i) The kind and amount of the debt secured;
(ii) The time limit for the debtor to perform his obligation;
(iii) The name, quantity, quality, condition, location, ownership or ownership of The right to the use of the mortgaged property;
(iv) The scope of the guarantee of mortgage.


Article 186
The mortgagor and the mortgagee may not stipulate that the ownership of the mortgaged property shall be transferred to the creditor in case the mortgagee's claim is not satisfied after maturity of the debt.
Article 187
Where a party mortgages assets provided for in Article 180 (i)-(iii) of this Law or houses under construction provided for in Article 180 (v) of this Law, he shall register the mortgaged property, and the mortgage contract shall become effective as of the date of registration.
Article 188
Where a party mortgages movable property provided for in Article 180 (iv)-(vi) of this Law or ships and aircrafts under construction provided for in Article 180 (v) of this Law, the mortgage contract shall become effective as of the date of registration. If a party does not register the mortgaged property, he may not defend against the claims of third party of good faith
Article 189
Where enterprises, small business of industry and commerce and rural contractors mortgage movable property provided for in Article 181 of this Law, the mortgage contract shall become effective as of the date of registration. If a party does not register the mortgaged property, he may not defend against the claims of third party of good faith.
If a party registers the mortgaged property in accordance with Article 181 of this Law, he may not defend against the claims of third party which has paid the consideration and obtained the mortgaged property in the ordinary course of business operations.
Article 190
If a mortgagor leases the mortgaged property before the execution of mortgage contract, the original contract of lease continues in effect. If a mortgagor leases the mortgaged property after the establishment of right of mortgage, the lease may not defend against registered right of mortgage.
Article 191
If a mortgagor transfers mortgaged property with the consent of the mortgagee during the period of mortgage, the proceeds which the mortgagor obtains from the transfer of the mortgaged property shall be used to liquidate the claim secured by the mortgage or it shall be deposited with a third party agreed upon by the mortgagor and the mortgagee.
If the proceeds exceed the claim, the balance shall belong to the mortgagor; if the proceeds do not cover the claim, the difference shall be paid by the debtor.
The mortgagor may not transfer the mortgaged property without consent of mortgagee during the period of mortgage, unless the transferee pays off debts on behalf of mortgagor and the right of mortgage lapses.
Article 192
The right of mortgage may not be separated from the creditor's rights and transferred singly, nor used to secure other creditors' rights. If the creditor’s right is transferred, the right of mortgage shall be transferred at the same time, unless otherwise stipulated by laws or agreed by the parties.
Article 193
Where a mortgagor's acts are likely to cause the value of the mortgaged property to decline, the mortgagee shall be entitled to demand that the mortgagor cease and desist from such acts. Where the value of the mortgaged property has declined, the mortgagee shall be entitled to demand that the mortgagor restore the original value of the mortgaged property or provide security corresponding to the amount of the lost value. Where a mortgagor fails to restore the original value of the mortgaged property and fails to provide security, the mortgagee is entitled to request the mortgagor to liquidate the claim in advance.
Article 194
Mortgagee may waive the right of mortgage or order of right of mortgage. A mortgagor and a mortgagee may change the order of right of mortgage and amount of mortgaged debt by agreement, provided that, the change of right of mortgage shall not have negative impact to other mortgagees without written consent of such mortgagees.
Where a debtor shall provide guarantee of mortgage with its own property, if a mortgagee waives the right of mortgage or order of right of mortgage or change the right of mortgage, other guarantors shall be relieved of the suretyship liability to the extent that the mortgagee loses the priority in satisfying his claim, unless other guarantors commit to provide a guarantee.
Article 195
The mortgagee, who is not paid at the maturity of the obligation, may, through agreement with the mortgagor, be paid out of the proceeds from the conversion of the mortgaged property or from the auction or sale of the mortgaged property; other creditors may request the People’s Court to cancel such agreement within one year after they know or should have known the cause of cancellation if the interest of such creditors are adversely affected.
If the mortgagee and mortgagor fail to reach an agreement, the mortgagee may bring a lawsuit in a People's Court.
Market price should be taken as reference when converting the mortgaged assets into money or selling the mortgaged assets.
Article 196
If the right of mortgage is provided in accordance with Article 181 of this Law, the mortgaged property shall be determined if any of the following circumstances occur:

(i) Claim is not paid at the maturity of the obligation
(ii) Bankruptcy or dissolution of the mortgagor;
(iii) Other circumstances which may seriously affect the enforcement of right of mortgage;
(iv) Other circumstances which may seriously affect the enforcement of claim

Article 197
If the mortgaged property is seized by a People's Court because of the debtor's failure to perform his obligation prior to the maturity of the debt, the mortgagee shall, from the date of seizure, be entitled to collect the natural fruits severed from the mortgaged property and the legal fruits which the mortgagor may collect from the mortgaged property. If the mortgagee fails to notify the person who has the obligation to pay legal fruits of the fact that the mortgaged property is seized, the mortgagee's right shall not extend to such fruits.
The fruits mentioned in the preceding paragraph shall first be used to pay the expenses for collecting the fruits.
Article 198
If the proceeds from auction and sales of mortgaged property exceed the claim, the balance shall belong to the mortgagor; if the proceeds do not cover the claim, the difference shall be paid by the debtor.

Article 199
Where the same property is mortgaged to two or more creditors, the proceeds from the auction or sale of the mortgaged property shall be used for liquidation according to the following provisions:
(i) Where a mortgage contract takes effect with its registration, the liquidation shall be made in the order of the time of registration of the mortgaged property; if the registration is in the same order, the liquidation shall be made according to the respective proportions of the claims;
(ii) The claim secured by registered mortgage shall be satisfied prior to the claim secured by unregistered mortgage;
(iii) Liquidation of unregistered mortgage shall be made according to the respective proportions of the claims.

Article 200
When land use right of construction lot is mortgaged, newly built houses on the land are not mortgaged property. Where it is necessary to auction the land use right to the mortgaged construction lot, the newly-built houses on the land may be disposed of, according to law, together with the mortgaged property, but the mortgagee shall have no right to enjoy the priority of having his claim satisfied with the proceeds from the newly-built houses.

Article 201
Where the land-use right prescribed in Article 181 (iii) or the land-use right to the land occupied by the factories and other buildings of a township (town) or village enterprise is mortgaged prescribed in Article 183, the collective ownership and the uses of the land may not be altered without the legal procedure after enforcement of the right of mortgage.
Article 202
The holder of security interest shall enforce the security interest upon the expiry of prescribed period for litigation; if the holder of security interest fails to enforce the security interest within such period, it shall not be protected by the People’s Court.

Section II Maximum Mortgage Right

Article 203
Where a debtor or a third person provides a guarantee with mortgaged property for the claim to be occurred within a given period of time, if the debtor fail to perform his obligations, the mortgagee shall have the priority in satisfying its claim to the extent of the total amount of the claims.
Claim that exists before the establishment of right of mortgage of maximum amount may be converted into the debt secured by the mortgage of maximum amount as agreed by the parties.
Article 204
Where part of claim is transferred before the claim secured by the mortgage of maximum amount is determined, the right of mortgage of maximum amount may not be transferred, unless otherwise agreed by the parties.
Article 205
Before the determination of claim secured by the mortgage of maximum amount, a mortgagor and mortgagee may change the term, scope and maximum amount of the claim through agreement, provided that such change may not cause any negative impact to other mortgagees.

Article 206
The claim of mortgagee is determined under any of the following circumstances:
(i) Agreed term for determination of claim expires;
(ii) In absence of an agreed or explicitly agreed term of claim, the mortgagee or mortgagor request to determine the claim upon the expiry of two years as of the date of establishment of right of mortgage of maximum amount;
(iii) No new claim will occur,
(iv) The mortgaged property is sealed up or distrained;
(v) Bankruptcy or dissolution of the debtor or mortgagor;
(vi) Other circumstances prescribed by law under which a claim is determined.
Article 207
The provisions of this section and Section 1 of this Chapter shall apply to right of mortgage of maximum amount.

Chapter XVII Right of Pledge

Section 1 Pledge of Movable Property
Article 208
The debtor or a third party transfers the possession of his movables to the creditor as a security for debt. If the debtor defaults, the creditor shall be entitled to enjoy priority of having his claim satisfied with the proceeds of auction or sale of the pledged property.
The debtor or the third party mentioned in the proceeding paragraph shall be the pledgor, the creditor shall be the pledgee, and the movables transferred shall be the pledged property.
Article 209
Movables that transfer is strictly forbidden according to relevant laws and administrative regulations must not be used as security for debt.
Article 210
A pledgor and a pledgee shall conclude a pledge contract in writing.
A pledge contract shall include the following particulars:
(i) The kind and amount of the principal debt secured;
(ii) The time limit for the debtor to perform his obligation;
(iii) The name, quantity, quality and condition of the pledged property;
(iv) The scope of the guarantee of pledge;
(v) The time for delivering the pledged property.
Article 211
A pledgor and a pledgee may not stipulate in the contract that ownership of the pledged property shall be transferred to the pledgee if the obligation is not discharged at its maturity.
Article 212
The pledge shall be effective upon delivery of the pledged property.
Article 213
The pledgee shall be entitled to collect the fruits derived from the pledged property. If otherwise provided for in the pledge contract, the provisions there shall apply.
The fruits mentioned in the preceding paragraph shall first be used to pay the expenses for collecting the fruits.
Article 214
During the existence of the plegdge, the pledgee, without consent of the pledgor, shall be civilly liable for any losses arising from his use, lease or disposal of the pledged property.
Article 215
The pledgee shall have the obligation to maintain the pledged property in good condition. The pledgee shall be civilly liable for the loss or destruction of or damage to the pledged property resulting from his negligence in storage.
Where the pledgee is unable to maintain the pledged property in good condition and may thus cause loss or destruction of or damage to the pledged property, the pledgor may demand that the pledgee have the pledged property deposited, or demand that his obligation be discharged in advance and the pledged property returned.
Article 216
Where there is a possibility for the pledged property to perish or for its value to obviously decline, the pledgee may demand that the pledgor provide additional security in like amount. If the pledgor refuses to provide the additional security, the pledgee may auction or sell the pledged property, and conclude an agreement with the pledgor that the proceeds from the auction or sale shall be used to pay in advance the debt secured or be deposited with a third party as agreed upon with the pledgor.
Article 217
During the existence of the pledge, with the consent of the pledgor, the pledgee may transfer the right of pledge. However, the pledgee shall bear civil liability for any loss or destruction of or damage to the pledged property.
Article 218
The pledgee may abandon the right of pledge. Where the debtor pledges his own property and the pledgee abandon such right of pledge, then other guarantors may be exempted from their liability to the extent that the pledgee would have the priority in satisfying his claim from the proceeds of auction or sale of the property, unless other guarantors have committed to providing security in any event.
Article 219
Where the debtor performs his obligation at its maturity, or where the pledgor pays, prior to maturity, the debt secured, the pledgee shall return the pledged property.
If the pledgee is not paid at the maturity of the obligation, he may conclude an agreement with the pledgor that the pledged property be converted into money in order to pay the debt, or he may enjoy priority of having his claim satisfied with the proceeds of auction or sale of the pledged property. Market prices shall be used as reference in conversion and/or sale of the pledged property.

Article 220
The pledgor may request the pledgee to enforce the right of pledge in a timely manner. Where the pledgee fails to do so, the pledgor may request the court to conduct auction and/or sale of the pledged property.
Where the pledgor requests the pledgee to enforce the right of pledge in a timely manner, the pledgee shall compensate for any losses arising from his delay in exercising his right that is due.
Article 221
Where the money converted from the pledged property or the proceeds from auction or sale exceed the debt secured, the balance shall be paid to the pledgor. Where the money or the proceeds do not cover the whole debt secured, the difference shall be paid by the debtor.
Article 222
The pledgor and the pledgee may set by mutual agreement a pledge of maximum amount.
The provisions of mortgage of maximum amount set forth in Section 2, Chapter 17 of Part Four, shall apply to the pledge of maximum amount.

Section 2 Pledge Rights
Article 223
The following rights that a debtor or a third party is entitled to dispose of may be pledged:
(i) Bills of exchange, cheques, promissory notes;
(ii) Bonds, certificates of deposit;
(iii) Warehouse receipts, bills of lading;
(iv) Shares of stocks or certificates of stocks which are transferable;
(v) The rights to exclusive use of trademarks, the property right among patent rights and copyrights which are transferable according to law;
(vi) The right of collecting fees for use of road and power grid infrastructures;
(vii) Other rights which may be pledged according to laws and administrative regulations.
Article 224
Where a bill of exchange, cheque, promissory note, bond, certificate of deposit, warehouse receipt or bill of lading is pledged, the pledgor and the pledgee shall conclude a pledge contract in written form and the document of title shall be effective upon delivery to the pledgee.
Article 225
Where a bill of exchange, cheque, promissory note, bond, certificate of deposit warehouse receipt or bill of lading, which carries the date of payment or the date of delivery of goods, is pledged and if the date of its payment or delivery of goods is prior to the time limit for the performance of the obligation, the pledgee may be paid or accept the delivery of the goods, and conclude an agreement with the pledgor that the payment or the goods accepted shall be used to pay in advance the debt secured or be deposited with a third party as agreed upon with the pledgor.
Article 226
Where portions of fund and/or shares are pledged, the pledgor and the pledgee shall conclude a pledge contract in writing. Where the portions of fund and/or shares that have been registered with relevant security registration and settlement authority are pledged, the right of pledge shall become effective upon registration with the securities registration authorities. Where the shares of any other kinds are pledged, the right of pledge shall become effective upon registration with the administrative department in charge of commerce and commerce.
The portions of fund and/or shares pledged may not be transferred, unless otherwise agreed by the pledgor and the pledgee. The proceeds the pledgor obtained from the transfer of the portions of fund and/or shares shall be used to pay in advance the pledgee's claims secured, or be deposited with a third party.
Article 227
Where the right to exclusive use of trademarks, the property rights among patent rights and copyrights are pledged, the pledgor and the pledgee shall conclude a contract in writing. The right of pledge shall become effective upon registration with the administrative department in charge of commerce and industry.
If the property rights in the foregoing paragraph are pledged, the pledgor may not transfer or permit the right to be used by another, unless otherwise agreed by the pledgee and the pledgor. The proceeds from the transfer or license of use obtained by the pledgor shall be used to pay in advance the pledgee's claims secured or be deposited with a third party.
Article 228
Where the right of collecting receivables is pledged, the pledgor and the pledgee shall conclude a contract in writing and the right of pledge shall become effective upon registration with the competent authority.
The right of receivables collection, once it is pledged, shall not be transferred unless otherwise agreed by the pledgee and the pledgor. The proceeds from the transfer of the right shall be used to pay in advance the pledgee’s claims secured or be deposited with a third party.
Article 229
The pledge of rights is governed not only by the provisions of this Section, but also by the provisions of Section 1 of this Chapter.

Chapter XIX Lien

Article 230
If a debtor defaults in his debt, the creditor shall be entitled to retain the property under legal possession and to the priority of having the debt paid with the money converted from the property or proceeds from sale or auction of the property.
The creditor mentioned in the proceeding two paragraphs shall be the lien holder and the movables possessed shall be the retained property.
Article 231
Retained movables shall fall within the scope of creditor’s rights except in the case of a retention between enterprises.
Article 232
Where the property must not be retained according to law, such law shall prevail. Where the property shall not be retained as agreed upon by the parties concerned, such an agreement shall prevail.
Article 233
Where the retained property is dividable, the total amount of the retained property shall be equal to the value of the debt involved.
Article 234
The lien holder shall have the obligation to maintain the retained property in good condition. The lien holder shall be civilly liable for loss or destruction of or damage to the retained property resulting from his negligence.
Article 235
The lien holder shall be entitled to collect the fruits derived from the retained property.
The fruits mentioned in the preceding paragraph shall first be used to pay fruit collection expenses.
Article 236
The lien holder and the debtor shall reach an agreement upon the time limit of the debtor’s performance of obligations after the property is retained. In the absence of any agreement or any explicit agreement thereof, the lien holder shall grant a time limit of two (2) months or more for the debtor’s performance of obligations, except in the case of movables such as fresh, living and easily decayed goods. If the debtor defaults within the specified time limit, the lien holder may convert the retained property into money upon agreement with the debtor, or enjoy the priority of having the debt paid with the money converted from the property or proceeds from sale or auction of the property.
Market prices shall be used as reference in conversion and/or sale of the retained property.
Article 237
The debtor may request the lien holder to enforce the right of lien in a timely manner. Where the lien holder fails to do so, the debtor may request the court to conduct auction and/or sale of the retained property.
Article 238
Where the money converted from the retained property or the proceeds from auction or sale exceed the debt secured, their balance shall be paid to the debtor; where the money or proceeds do not cover the entire secured debt; the difference shall be paid by the debtor.
Article 239
Where the movable property that have already been mortgaged or pledged are retained at a later time, the lien holder shall enjoy the priority of having the debt paid with the money converted from the property or proceeds from sale or auction of the property.
Article 240
Where the lien holder loses his possession of the retained property or accepts other security provided by the debtor, the right of retention shall lapse.

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Table of Contents

Part I: GENERAL PROVISIONS

Part II: OWNERSHIP

Part III: USUFRUCTUARY RIGHTS

Part IV: SECURITY INTEREST IN PROPERTY RIGHTS

Part V: POSSESSION

English Translation of Property Rights Law of the People’s Republic of China (2007): PART III: Usufructory Rights

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PART III: USUFRUCTUARY RIGHTS

Chapter X General Stipulations

Article 117
The owner of the usufructuary right shall, within the extent permitted by law, enjoy the rights to possess, utilize and obtain profits from the real or movable properties owned by others.
Article 118
Institutions and individuals may occupy, utilize and obtain profits from such natural resources as owned by the State, or owned by the State while used by the collective and/or collectively-owned according to law.
Article 119
Unless otherwise provided by law, the State introduces the system of compensated use of natural resources.
Article 120
In exercising its rights, the owner of the usufructuary right shall abide by the regulations respecting the protection and reasonable exploration of the resources. The obligee may not intervene in the exercise of rights by the owner of the usufructuary right.
Article 121
Where the expropriation of the real or movable properties lead to the lapse of the usufructuary right or affect the exercise of the usufructuary right, the owner of the usufructuary right shall be entitled to gain relevant compensations pursuant to the provisions of Article 42 and 44 of this Law.
Article 122
The right to use the sea areas gained legally shall be protected by law.
Article 123
The right relating to mineral exploitation, mining, drawing water and the right to engage in aquaculture, fishing from inland waters and beaches obtained legally shall be protected by law.

Chapter XI Right to Land Contractual Management

Article 124
Rural collective economic organizations apply the dual operation system characterized by the combination of centralized operation with decentralized operation on the basis of operation by households under a contract.
Land contractual operation system shall be applied according to law in respect of farmlands, forestlands, grasslands collectively owned by peasants and land owned by the State but collectively used by peasants as well as other lands used for agricultural purpose.
Article 125
The contractor of the right to land contractual management shall enjoy the right to possess, utilize and obtain profits from the farmlands, forestlands and grasslands, and shall have the right to engage in such agricultural production as crop farming, forestry and animal husbandry.
Article 126
The contracted term of farmland shall be thirty years, thirty to fifty years for grassland and thirty to seventy years for forestland. The contracted term for forest land with special forests may be prolonged upon approval of the relevant competent forestry administration department of the State Council.
Where the contracted term provided in the preceding paragraph expires, the contractor of the right to land contractual management may continue the contract according to relevant provisions of the State.
Article 127
The right to land contractual management shall be established upon the effective date of the contract relating to the right to contractual land management.
The people’s government above county level shall issue to the contractor of the right to land contractual management the certificate of right to land contractual management, the forest management certificate, certificate(s) of the right to use grassland and register and record them, confirming the right to land contractual management.
Article 128
The contractor of the right to land contractual management shall be entitled to circulate such right by adopting such means as subcontract, exchange and assignment in accordance with the provision is of the Rural Land Contract Law. The circulated term may not exceed the remaining period of the contract term. The contracted land, without being approved in accordance with law, may not be used for purpose other than agricultural construction.
Article 128
Where the contractor of the right to land contractual management exchanges with others or assigns the right to land contractual management, the contractor shall, if required by parties concerned, apply for modification registration regarding the right to land contractual management with the people’s government above county level, and shall not be against bona fide third party if no such registration is conducted.
Article 130
The contract letting party may not adjust the land under contract within the contract term.
Where it is necessary to appropriately adjust the farm land and grassland in case that the contracted land is severely damaged by natural disaster, such adjustment shall be handled according to Rural Land Contract Law.
Article 131
The contract letting party shall not withdraw the contracted land within the contract term. If there are provisions otherwise provided for by Rural Land Contract Law, such provisions shall be observed.
Article 132
The contractor of the right to land contractual management shall, pursuant to the provisions of the 2nd paragraph of Article 42 of this Law, obtain the relevant compensations in the event of expropriation of its contracted land.
Article 133
With regard to such rural lands as wasteland contracted out by means of invitation to bid, auction, open consultation, the right to land contractual management shall be circulated by adopting such means as assignment, mortgage and ways otherwise according to Rural Land Contract Law and relevant regulations of the State Council.
Article 134
Where the State-owned farmland is contracted out for operation, relevant provisions of this Law shall apply.

Chapter XII Right to the Use of Construction Land

Article 135
The owner of the right to the use of land for construction use shall, according to law, be entitled to possess, utilize and obtain profits from the State-owned land, and have the right, by utilizing such land, to build buildings and their accessory facilities.
Article 136
The right to the use of land for construction use shall include right to the use of the land’s surface, ground or underground. The newly-established right to the use of land for construction use may not infringe upon the rights of already-established usufructuary right.
Article 137
The right to the use of land for construction use may be established by means of assignment or transfer.
Such operation lands as for industrial, commercial, tourism, entertainment and commercial use and one land with two or above intentional users shall be assigned by auction or invitation to bid.
The establishment of the right to the use of land for construction use by way of transfer is strictly restricted. Where the way of transfer is adopted, provisions relating to land use stipulated by laws, administrative regulations shall be observed.
Article 138
Where the right to the use of land for construction use is established by means of auction, invitation to bid and agreement, the parties concerned shall enter into a written contract on assignment of the right to the use of land for construction use.
The contract on assignment of the right to the use of land for construction use shall include the following terms:
(i) The names and domiciles of the parties concerned;
(ii) The location and size of the land;
(iii) The space occupied by the buildings, structures and the relevant accessory facilities;
(iv) The purpose of the land;
(v) The term of the use;
(vi) Such fees as the assignment fee and terms of payment;
(vii) Disputes resolution;
Article 139
The application for registration of the right to the use of land for construction use shall be filed with the registration departments. The right to the use of land for construction use shall be set up upon registration. The registration department shall issue to the owner of the right to the use of land for construction use the certificate of the right to the use of land for construction use.
Article 140
the owner of the right to the use of land for construction use shall in a reasonable way utilized the land and shall not change the purpose of the land; such change (if necessary) shall occur with the approval from relevant competent administrative department according to law.
Article 141
The owner of the right to the use of land for construction use shall pay such rates as assignment fee pursuant to relevant provisions provided for by law and the terms of the contract.
Article 142
The ownership of the building, structure and their accessory facilities built by the owner of the right to the use of land for construction use shall belong to such owner, unless there is evidence to the contrary sufficient to invalidate that.
Article 143
Except as otherwise provided for by law, the owner of the right to the use of land for construction use shall have the right to transfer, exchange, make as capital contribution, donate or mortgage the right to the use of land for construction use.
Article 144
Where the owner of the right to the use of land for construction use transfer, exchange, make as capital contribution, donate to others or mortgage the right to the use of land for construction use, the parties concerned shall enter into corresponding contract in writing. The term of such contract to be determined by parties concerned shall not exceed the remaining duration of the right to the use of land for construction use.

Article 145
Where the owner of the right to the use of land for construction use transfer, exchange, make as capital contribution, donate to others or mortgage the right to the use of land for construction use, application for modification registration shall be filed with the registration department.
Article 146
Where the right to the use of land for construction use is transferred, exchanged, made as a capital contribution or donated, the buildings, structures and their accessory facilities affiliated with such land shall be disposed of accordingly.
Article 147
Where the buildings, structures and their accessory facilities affiliated with a land for construction use is transferred, exchanged, made as a capital contribution or donated, the right to the use of such land for construction use as being occupied by such buildings, structure and their accessory facilities shall be disposed of accordingly.
Article 148
Where, prior to expiration of the term of the right to the use of land for construction use, it is necessary to retract such land for public interest, compensations shall be provided with regard to the houses and other real property built on the land pursuant to the provisions of Article 42 of this Law and the corresponding transfer fee shall be returned.
Article 149
The term of the right to the use of land for building houses shall automatically renewed upon expiration.
The term of the right to the use of land for non-house building purpose shall be renewed according to laws and regulations upon expiration. With regard to ownership of the houses built on the land and other real property related, relevant agreement (if any) shall be abided by, or, if there is no such agreement, the relevant provisions stipulated by law and administrative regulations shall be observed.
Article 150
The assignor shall, promptly upon lapse of the right to the use of land for construction use, proceed with the cancellation registration with the registration department that shall take back the certificate of the right to the use of land for construction use thereafter.
Article 151
Where the collectively-owned land is used for construction purpose, it shall be managed in accordance with such laws and regulations as the Law of Land Adeministration.

Chapter XIII Right to the use of the Residential Housing Land

Article 152
The owner of the right to the use of residential housing land shall enjoy the right to possess and utilize such land as collectively owned, and the right to build residential house and its accessory facilities on such land.
Article 153
Such laws as the Law of Land Administration and relevant regulations of the State shall be applicable to the attainment, exercise and assignment of the right to the use of residential housing land.
Article 154
The right to the use of residential housing land shall lapse accordingly in the event that such land is destroyed and lost due to natural disasters. New residential housing land shall be relocated to those villagers losing their residential housing land.
Article 155
Where the registered right to the use of the residential housing land lapses or is assigned,
modification or cancellation registration shall be handled in a timely manner.

Chapter XIV Easement

Article 156
The owner of easement shall have the right to improve the benefits of the real property of its own by utilization of real property of others according to terms of a contract.
The term “real property of others” as used in the preceding paragraph shall refer to the Land for Easement, and the “real property of its own” shall refer to the “Land Needing Easement”.
Article 157
To establish easement, the parties concerned shall enter into a written easement contract, the terms of which are as follows:
(i) The names or titles and domiciles of the parties concerned;
(ii) The location of the Land for Easement and the Land Needing Easement;
(iii) The purpose and methods with regard to the utilization of the Land for Easement;
(iv) The term for the utilization;
(v) Relevant fees and the terms of payment;
(vi) Disputes resolution.
Article 158
The easement shall be established upon the effective date of the easement contract. Where the parties concerned require registration, the application for easement registration may be filed with the registration departments; if no registration for easement is conducted, such easement shall not be against any bona fide third party.
Article 159
The obligee of the Land for Easement shall, in accordance with terms of the contract, allow the easement owner to utilize the land and may not prevent the easement owner from exercising relevant rights.
Article 160
The easement owner shall make use of the Land for Easement in conformity with the purpose and methods agreed upon in respect of the utilization of the Land for Easement and make reasonable efforts to reduce restriction upon the property rights of the obligee of the Land for Easement.
Article 161
The term of the easement to be decided by the parties concerned shall not exceed the remaining duration of the term of such usufructuary right as the right to land contractual management and to the use of land for construction use.
Article 162
Where the owner of the land who enjoys or burdens the easement establishes the right to land contractual management and/or the right to the use of residential housing land, the contractor of the land contractual management and/or the owner of the right to the use of the residential housing land shall continue enjoying or burdening the established easement.
Article 163
Where the right to land contractual management, the right to the use of land for construction use and/or the right to the use of residential housing land have been established, the owner of the land may not set up the easement without the consent from the owner of the usufructuary right.
Article 164
The easement may not be assigned alone. Except as otherwise agreed upon in the contract, along with the right to land contractual management, the right to the use of land for construction use, the easement shall be transferred accordingly according to law.
Article 165
The easement may not be mortgaged alone. Where the right to land contractual management and the right to the use of land for construction use is mortgaged, the easement shall be assigned accordingly upon the realization of such mortgage.
Article 166
Where part of the right to land contractual management and the right to the use of land for construction use of the Land Needing Easement are assigned and the assignment involves the easement, the assignee shall enjoy the easement.
Article 167
Where part of the right to land contractual management and the right to the use of land for construction use of the Land for Easement are assigned and the assignment involves the easement, the easement shall be abiding by the assignee.
Article 168
The obligee of the Land for Easement shall have the right to rescind the easement contract to give rise to lapse of such easement in case of any of the following on the part of the owner of the easement:
(i) Abusing the easement in violation of regulations provided by law or terms of the contract;
(ii) Failing to pay the fee after being reminded to make the payment twice within a reasonable time limit upon the expiration of the scheduled term for payment while utilizing the Land for Easement with charges.
Article 169
Modification or cancellation registration shall be handled promptly in case of modification, assignment or lapse of the registered easement.

Go to:

Table of Contents

Part I: GENERAL PROVISIONS

Part II: OWNERSHIP

Part III: USUFRUCTUARY RIGHTS

Part IV: SECURITY INTEREST IN PROPERTY RIGHTS

Part V: POSSESSION