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BPEL4WS is one of the most important business process modelling languages. One distinct feature of it is the fully programmable fault and compensation handling mechanism, which allows the user to specify the compensation behaviors of processes in application-specific manners. In this paper, we present a formal operational semantics to a simplified version of BPEL4WS, with some important concepts related to fault and compensation handling proposed and discussed, especially, the compensation closure and the compensation context. We also discuss some insights into the BPEL4WS language and its implementation obtained from this study.