On October 20, 2015, The National Health and Family Planning Commission (“NHFPC”) publicly announced and put into effect the Administrative Measures on Accepting Donations for Public Welfare by Healthcare Entities (for Trial Implementation) (“Healthcare Donation Measures”). This replaced the prior Interim Measures for the Administration of the Acceptance of Social Donations and Financial Aids which was issued in 2007. The Healthcare Donation Measures affect healthcare institutions, which include hospitals, public welfare social groups, foundations, and other organizations, and set out detailed guidelines for evaluating, accepting, and utilizing the donations they receive from companies and individuals.

For limited purposes

The Healthcare Donation Measures allow healthcare entities to accept donations for the limited purposes of reducing fees for medical treatment, providing public health services and education, training healthcare faculties, academic and scientific research, the construction of facilities and provision of equipment, as well as other non-for-profit activities.

The Healthcare Donation Measures explicitly prohibit healthcare entities from accepting donations where the purpose is for-profit commercial activities or the procurement of goods, where the donor maintains certain rights to economic interests, intellectual property, and/or industrial data, if it is associated with political purposes, if the donation would damage public interest or legal rights of others, or if the donation would violate PRC laws such as unfair competition or commercial bribery, or quality standards.

A transparent process

The Healthcare Donation Measures outline a vetting process to increase the transparency of donations. This requires the management team of the receiving healthcare institution to issue a pre-evaluation opinion on the donation. It includes requirements for proper financial management, accurate accounting records, and certain contractual language.

The Healthcare Donation Measures also include an information disclosure mechanism which requires that details about donations be published on official websites and/or major media outlets. Donations will also be subject to an economic responsibility audit.

If your company is considering donating money, equipment, products, and/or services to a Chinese healthcare institution it is important to ensure that the local institution to which you are donating complies with the procedures prescribed by the Healthcare Donation Measures before accepting  your donation. These measures should also ensure that your donation is put to proper and good use.