Under Section 62(1) and (2) of the Banking Code and Section 27(1) of the Credit Cooperatives Law, in the event that any credit cooperative conducts its business operation in a manner contrary to its articles or any provisions of law, or is unable to carry out its business operation in a sound manner thus harming the rights and interests of its members or depositors, or any bank’s business or financial affairs have significantly deteriorated, the competent governing authorities shall impose the following sanctions: quash resolutions; recall or replace employees; restrict the amount of remunerations to directors and supervisors; discontinue or release their official title; compel such cooperative or bank to cease operation and windup business within a time limit; deploy personnel for administration, takeover or merger; issue a dissolution order; revoke their permit; or take other “necessary actions”. These “necessary actions” refer to reasonable measures which are necessary in the emergency circumstances whereby even the adoption of the above stated measures stipulated in the legal provisions would not be able to achieve the expected results. These actions are necessarily conducted under the premise that the preconditions stated in Section 27(1) of the Credit Cooperative Law, “In the event the credit cooperative is unable to carry out its business operation in a sound manner thus possibly harming the rights and interests of its members or depositors…” and Section 62(1) of the Banking Code, “In the event the bank is unable to satisfy its liabilities or could possibly compromise the interests of its depositors due to the significant deterioration of its financial and business affairs…” are satisfied. The measure of universal acceptance by other financial institutions is sometimes employed by the competent governing authorities on banks or credits cooperatives which have evidenced significant deterioration of their financial affairs or have shown an inability to conduct their business operation in a sound manner. In addition to the satisfaction of the abovementioned conditions, the measure of universal acceptance must be processed in accordance with the procedures stipulated in the relevant provisions. Further, the bank or credit cooperative which has the measure of universal acceptance imposed upon it must have failed to secure the equivalent fund or guarantee, or failed to employ other effective measures to resolve the deficiency of assets and pay off its debts in time. Only thus shall the measure of universal acceptance fall within the meaning of “necessary actions”.　　　　　

　　　 Section 27(1) of the Credit Cooperative Law states: “In the event that any credit cooperative conducts its business operation in a manner contrary to its articles or any provisions of law, or is unable to carry out its business operation in a sound manner thus possibly harming the rights and interests of its members or depositors, the competent governing authorities shall impose the following sanctions: a) quash resolutions passed in any types of statutory meetings; although any resolutions which are contrary to any law or articles are obviously invalid; b) recall or replace managers or employees, or order the credit cooperatives to impose the necessary sanctions; c) restrict the amount of remunerations to directors and supervisors; d) discontinue or release the official title of the directors and supervisors; e) suspend part of its business operation; f) compel windup or merger; g) order its dissolution; or h) any necessary actions. Section 27(2) states: “Sanctions a) to d) shall be directly handled by the district (municipal) government or the provincial (municipal) department of finance and shall be reported to the central governing authority. Sanctions e) to f) shall be handled by the central governing authority.” Section 62(1) of the Banking Code states: “In the event a bank is unable to satisfy its liabilities or could possibly compromise the interests of its depositors due to the significant deterioration of its financial and business affairs, the central governing authority shall compel the termination of its business and windup within a time limit, suspend parts of its business operation, deploy personnel for the administration or takeover of the bank, or any other necessary actions. The central governing authority shall also request the relevant authorities to restrict the persons responsible from leaving the country.” Section 62(2) states: “While in the process of administering or taking over the bank, the central governing authority shall suspend, completely or partially, the authority of the shareholders, directors or supervisors.” The measures stipulated in these various provisions authorize the respective competent governing authorities to, after considering the actual circumstances and in accordance with the principle of proportionality, select the measures sufficient to achieve the goal of maintaining the financial order while incurring the minimum social cost and safeguarding the people’s property rights. The “necessary actions” refer to reasonable measures which are necessary in the emergency circumstances whereby even the adoption of the above stated measures stipulated in the legal provisions would not be able to achieve the expected results. These actions are necessarily conducted under the premise that the preconditions stated in Section 27(1) of the Credit Cooperative Law, “In the event the credit cooperative is unable to carry out its business operation in a sound manner thus possibly harming the rights and interests of its members or depositors…” or Section 62(1) of the Banking Code, “In the event the bank is unable to satisfy its liabilities or could possibly compromise the interests of its depositors due to the significant deterioration of its financial and business affairs…” are satisfied. The measure of universal acceptance by other financial institutions is sometimes employed by the competent governing authorities on banks or credits cooperatives whose financial affairs have significantly deteriorated or which are unable to conduct their business operation in a sound manner. In addition to the satisfaction of the abovementioned conditions, the measure of universal acceptance must be processed in accordance with the procedures stipulated in the relevant provisions. Further, the bank or credit cooperative which has the measure of universal acceptance imposed upon it must have failed to secure the equivalent fund or guarantee, or employ other effective measures to resolve the deficiency of assets and pay off its debts in time. Only thus shall the measure of universal acceptance fall within the meaning of “necessary actions”.