2023年9月22日，美国商务部正式公布了《芯片法》护栏细则的最终规则。相较于2023年3月所发布的护栏细则的拟议规则来看，本次的最终规则虽未对相关内容进行原则性修订，但是部分调整仍可能对半导体供应链带来实质性影响。

2023年7月26日，美国司法部（DOJ）、美国商务部产业安全局（BIS）以及美国财政部海外资产控制办公室（OFAC）联合发布了关于主动披露潜在违规行为的执法说明（以下简称“《三部门执法说明》”），总结了向该三部门分别就潜在出口管制和经济制裁违规事宜进行主动披露的相关政策。

刚刚生效的美国《2022年芯片与科学法案》（CHIPS and Science Act of 2022）被业内人士称为美国落实对华“精准脱钩新举措”的关键性一步，作为其中重要组成部分的《2022年芯片法案》（Chips Act of 2022）尤为受到芯片与半导体研发制造领域的关注，同时也引发了供应链和投资界的不安。本文将从所谓“中国护栏”条款的分析入手，重点阐释在战略层面与其保持高度一致的出口管制最新动向与未来走势，为企业就如何开展风险分析与制定应对策略，提出具体的分析要点和思路等相关实务建议。

​刚刚生效的美国《2022年芯片与科学法案》（CHIPS and Science Act of 2022）被业内人士称为美国落实对华“精准脱钩新举措”的关键性一步，作为其中重要组成部分的《2022年芯片法案》（Chips Act of 2022）尤为受到芯片与半导体研发制造领域的关注，同时也引发了供应链和投资界的不安。本文将从所谓“中国护栏”条款的分析入手，重点阐释在战略层面与其保持高度一致的出口管制最新动向与未来走势，为企业就如何开展风险分析与制定应对策略，提出具体的分析要点和思路等相关实务建议。

This book features a large number of typical cases handled by the KWM IP litigation team from 2013 to 2020, many of which were selected as "Top 10 IP Cases" and "Top 50 Typical IP Cases of the Year in Chinese Courts" by the Supreme People's Court, or "Typical IP Cases of the Year" and "Innovative IP Cases of the Year" by local courts. The judgments made by courts across the country in these cases reflect the judicial philosophy and implementation standards of such courts in the fields of copyright, trademark, patent, trade secrets, layout-design of integrated circuits, monopoly and competition in recent years. Some judgments have great significance for China's IP legal practice and IP protection. Most of the authors of this book are lawyers who have represented clients in such relevant cases. Relying on their expertise and strength, these lawyers successfully defended the legitimate rights and interests of rights holders by effectively collecting and using the evidence, and contributed to the innovation and improvement of adjudication rules in the cases.

美国《维吾尔强迫劳动防止法案》全文为PDF格式，英文，共8页。仅供相关学者研究参考，若需要此文献请联系Wells客服（联系电话：010-88578296 13801069450；邮箱：editor2@wells.org.cn）提供，Wells公司也可提供中文翻译服务。

An employee joined the company last March. At the end of March, he submitted a “Certificate of Diagnosis” of cervical spondylosis, claiming that he needed to rest for half a month as per doctor’s advice. Three days after approval of his sick leave, the company found that he posted several selfies took on the beach on his WeChat Moments, with the location shown as Brazil. The company believed that this employee intentionally applied for sick leave to take a holiday abroad, and the company was completely deceived by his dishonest behavior. On the ground of “gross misconduct”, the company terminated his employment contract. Consequently, the employee submitted the dispute to the Arbitration Commission. After reviewing case materials, the Arbitration Commission found that the diagnostic was signed by the attending physician and sealed by the hospital, which means it is authentic. Meanwhile, the company’s internal policies do not restrict the location where employees may take their sick leaves. This article will analyze some questions in this case.

The Cybersecurity Law of the People’s Republic of China (the “Cybersecurity Law”), adopted by the Standing Committee of the National People’s Congress on November 7th, 2016, will take effect on June 1st, 2017. In order to ensure its implementation, the Cybersecurity Law set targets for construction of key areas of the system and for authorities to formulate specific implementation measures. The Measures for the Security Assessment of Personal Information and Important Data to be Transmitted Abroad(Draft for Comment) (the “Assessment Measures”) was just issued on April 11th, 2017. This Article analyzes its main points, describes practical compliance by affected enterprises and points out the issues that need to be further clarified or improved.

On behalf of Qualcomm Incorporated, King & Wood Mallesons recently asserted several standard essential patents (SEPs) against Meizu, a Zhuhai-based handset manufacturer. Meizu concluded a license agreement with Qualcomm on fair, reasonable, and non-discriminatory terms, in settlement of the royalty dispute after it was threatened with an injunction. Article 24 of the Supreme People’s Court Interpretation of Issues of Application of Laws in the Handling of Patent Infringement Disputes (II) was the legal basis on which Qualcomm accused Meizu of patent infringement. Since judicial interpretations merely guide the application of laws and regulations the courts will not make decisions that conflict with legislation. Hence paragraph 4, which provides that where laws or regulations otherwise stipulate the role of any patent in a standard, such laws or regulations shall prevail. This essay is a preliminary consideration of that article.

On November 28, 2016, the Ministry of Human Resources and Social Security issued the Notice on Several Issues in the Transfer and Continuation of Basic Pension Insurance of Urban Enterprise Employees clarifying several issues arising from the implementation of the Interim Measures for the Transfer and Continuation of Basic Pension Insurance of Urban Enterprise Employees since 2010. This Notice pays more attention to special groups-related and practical issues in the transfer of employees’ basic pensions, substantiates local governments’ responsibilities, and upholds the principles of safeguarding employees’ pension entitlement accrual and the payment of pensions. This article deals with new rules for basic pension transfer and continuation, including regulations on urban employees’ basic pension transfer and continuation and new rules in the notice.

Reduction of an employee’s salary is often a consequence of the employer’s decision to demote the employee for some reason. However, the employer should refrain from meting out a pay cut arbitrarily. Usually, lawful pay cuts occur in two circumstances – when both employer and employee agree on it, or when the employer enforces it by law. As with an employee’s incompetence, determination of “reasonable ranges” of demotions and pay cuts rests with arbitrators and judges in a labor dispute. As there are numerous legal restraints on the reduction of an employee’s salary, the employer must exercise caution when it considers pay cuts for its employees. This article deals with pay cut, including pay cut agreement between employer and employee and employer’s unilateral pay-cut decision.

According to the PRC labor laws, an employer is obliged to ensure employee’s right to stipulated medical treatment period if an employee is suffering from illness. In practice, when an employee goes to the hospital and seeks professional advice from a doctor, the doctor will take account of all factors concerning illness and health risks of the employee and then issue official medical certificate, with which the employee may apply for sick leave with the employer. Accordingly, under this general sick leave application practice, if an ill-meaning employee is well acquainted with some doctors from the hospital who provides him or her with fake or improper medical certificate, the employee may apply for sick leave with the employer, an act deemed as unreasonable application for sick leave. What measures can an employer prepare to prevent the abovementioned situations from happening? And what measures can an employer take against the employee who has already enjoyed unreasonable sick leave? This article recommends several tricks to employers for dealing with such occasions.

International health food companies and infant formula food suppliers rejoiced on March 17, 2017, when the China Ministry of Commerce confirmed that the current supervision model will likely be adjusted for cross border e-commerce retail imports. The announcement advised that the new model, which will take effect from January 1, 2018, will apply to 15 pilot zones. For the smooth development of cross-border e-commerce, and to maintain the stable supervision of cross-border e-commerce, as approved by the State Council, at current stage, cross-border ecommerce products shall be treated as personal items temporarily for supervision perspective. Based on this, the responsibilities of e-commerce entities will be emphasized and the supervision measures will be optimized, quality safety control will be adopted. A risk emergency processing mechanism will be established. With regards to the import products which have a relatively greater quality risk, further measures will be taken. In the future, the supervision will be further updated as necessary based on the E-commerce Law and the development of the cross-border retail import.

To protect your IP rights, sending potential infringers a Cease & Desist Letter or Warning Letter is one of the most common tools. Is it a necessary step before starting any legal proceedings in China？What legal consequences does it entail? Are there any issues that must be attended to? How effective is the Letter? This article will try to project a bird’s eye view regarding everything you should know before sending the Letter to your potential infringers, including purpose of sending the letter, legal effects of sending the letter, adverse effects and legal risks of sending the letter, common responses and consequences of sending the letter, scenarios where the letter may solve problems and so on.

The reform and opening up in China has been a process of establishing and improving a modern market system. As this process deepens, “building a unified, open, orderly and competitive market” has become the goal of the market economy reform. China’s 13th Five-year Plan obviously lays an unprecedented emphasis on the market’s fundamental role in resource allocation. Meanwhile, the government is taking or strengthening regulatory measures to control market disrupting risks, resorting to the law to ensure orderly operation of the market economy and to resolve externality problems of the market. Compliance issues regarding anti-corruption, employment, tax, anti-monopoly, and environmental protection are now under strict government supervision. Reinforcing the compliance system, therefore, by incorporating it into the “Now Normal” management mechanism is a path enterprises must take in their development. This article deals with the compliance challenges for businesses in the “new normal”.

The move towards self-driving cars is relentless and China as the world’s largest auto market and a leader in internet technologies wants to be at the cutting edge of this revolution. That self-driving cars is a huge potential market. Advanced Driver Assistance Systems (ADAS) is one of the fastest-growing sectors in the automotive field in recent years and is considered by most commentators to be an essential milestone towards automated driving. Although market, demand and the technology for ADAS is in place in China and manufacturers are ready to introduce such systems the widespread adoption has been slowed by the sluggish pace of regulations. This article focuses on the main legal issues for aftermarket solutions under the current PRC legal regime. As the technology is innovative it is natural that the legal regime has difficulty in keeping up – the PRC legal regime is no exception. Under current PRC law, Aftermarket Solutions for ADAS will likely face both legal barriers as well as liability issues.

Finally after seven months of waiting, the Administrative Measures on Due Diligence of Tax Related Information in respect of Non-Resident Financial Accounts were jointly promulgated by the State Administration of Taxation, Ministry of Finance, People’s Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission on May 19, 2017. Compared to the previous draft for public comments, there is no material change in the Measures. The Measures mainly focus on self-certification of an individual’s tax residence, self-certification of an entity’s tax residence and self-certification of a controlling person’s tax residence.

Answers to Questions on Trial of Labor Disputes (IV) was released by the Zhejiang High People’s Court and the Labor Disputes Arbitration Commission of Zhejiang Province on 30 December 2016. These clarify some common questions about judicial practice and existing rules. This article deals with such questions including whether an employee is entitled to double his salary, whether sick leave counts during the probationary period, whether an employee is entitled to receive bonus if he resigns before his annual performance is paid, whether employers can terminate post-employment non-compete agreements, whether compensation will be given with False identities and work-related injuries and a definite 24 month period for specific diseases or not.

On May 2, 2017, the Cyberspace Administration of China successively published on its official website the Measures for Security Review of Network Products and Services (Tentative) (the “Review Measures”), the Provisions on the Administration of Internet News Information Services (the “Administrative Provisions”) and the Procedural Regulations for Administrative Law Enforcement Concerning Internet Information Content Management (the “Procedural Regulations”). While the Administrative Provisions were more like an amendment of those in 2005, the Procedural Regulations are indeed the first departmental regulations on procedural issues within the framework of the Cybersecurity Law. While the Review Measures establish a framework, the Procedural Regulations set out “unified, comprehensive, specific and updated” rules in accordance with the fundamental principles of theAdministrative Penalty Law. They provide a strong legal basis for the future supervision of the management of internet information content and the enforcement of that supervision. This article focuses on the main features and content of the procedural regulations.

The Provisions on the Management of Internet News Services were released by the Cyberspace Administration of China on 2 May 2017. Issued jointly by the State Council Information Office and the Ministry of Information Industry, the Provisions replace the previous provisions from 2005. They establish a brand-new regulatory framework and approach in response to the development of the Internet over the last decade, responding to the growth of self-media and diversified means of communication. The Provisions are expected to open up a new era of Internet news regulation in China. While the relevant government organs retain their respective jurisdictions, the Cyber Security Law’s requirements for “content security”, “information security”, and “technology security” will permeate into individual regulations and different regulatory practices. In this way, service providers and users will have consistent codes of conduct to follow regardless of their specific areas of service. No doubt this will promote a stable and predictable regulatory environment for businesses and other market players.

China’s Belt and Road Initiative is a visionary policy. It is an ambitious framework that is projected to see significant numbers of infrastructure and other projects set up under its auspices. However, with such strikingly ambitious vision comes unchartered risks. A large amount of contracts has been signed by Chinese enterprises for projects in countries along the Belt and Road routes, and the number of these cross-border contracts is set to continue to increase. Other than infrastructure and related projects, logistics and maritime sectors are also likely to see heightened activity in the Belt and Road regions. The significant opportunities of the Belt and Road also come with significant risks of legal disputes arising. This is particularly the case given that the Belt and Road sees commercial contracts being concluded between parties from countries with very different legal systems and traditions. The uncertainty of financial exposure or other negative implications in the event of a dispute is a confronting spectre that threatens every cross-border transaction. This article will discuss three key risks for cross-border commercial disputes and the ways to prevent and minimise exposure in order to fully benefit from the Belt and Road opportunities.

The Cyberspace Administration of China (“CAC”) announced on 2 May 2017 the Measures for Security Review of Network Products and Services (Tentative) (the “Review Measures”), which will be formally implemented from 1 June 2017. The 16 articles of the Review Measures set up an institutional framework for the security review of network products and services. This is an integral part of the whole cybersecurity regime established by the Cybersecurity Law of the People’s Republic of China. The Review Measures represents a further step and makes improvements to the CAC’s Measures for Security Review of Network Products and Services (Draft Review Measures) which was released on 4 February 2017. This article will canvas the main provisions of the security review system for network products and services, the highlights of the Review Measures and the issues to be addressed, to provide guidance to companies in terms of cybersecurity compliance.

As shown by the “Belt and Road Initiative Big Data Report (2016)” compiled by the Leading Group Office for Promoting “Belt and Road” Construction, Russia tops the list of “One Belt, One Road” countries in terms of cooperation-worthiness. With its vast domestic market, stable political environment, complete infrastructural network and friendliness towards investment from China, Russia is obviously a big magnet for Chinese investment and shows enormous potential. To achieve an optimum tax structure, facilitate financing and improve ease of exit, Chinese investors in Russia tend to use Special Purpose Vehicles in a third country or region. The following discussion of the investment structures and paths for Chinese enterprises investing in Russia is based on the Yukos series and the latest developments in Sanum v. Laos, as well as the BIT between China and Russia, with a view to better resolving any disputes.

With the boom of the data industry in China, data has been widely recognized as a form of asset, and data transactions are thriving nowadays. Correspondingly, various data transaction contracts emerge as legal support for such transactions. As the property attribute of data is not clearly defined and rules on data ownership are yet to be enacted, however, problems relating to the validity and legal nature of data transaction contracts and applicable laws are unavoidable. Dealings in data represent a seemingly endless value chain ranging from data input, collection, maintenance, classification, verification, processing, to exchange, reprocessing, analysis and mining. This article focuses on the contracts that set out terms of data transfer and transaction under Chinese law.

During the last years, the number of Chinese outbound transactions to Germany have increased considerably and reached a record high in 2016. Often, Chinese investors are not familiar with the particularities of the European market. Against this backdrop, the need to mitigate transactional risk is increasing in particular for Chinese investors. The use of Warranty & Indemnity (W&I) insurance, has become commonplace in the US and European M&A markets over the last years. With SASAC having emphasized the importance of risk insurance in the context of outbound investments for SOEs in their regulation of 7 January 2017, the importance of W&I insurance for Chinese outbound M&A maybe further increase.

The China Bank Regulatory Commission (“CBRC”) has issued a set of new rules (“Rules”). The Rules apply to both domestic banks and foreign banks in China. This publication focuses on key issues that are relevant to foreign banks operating in China. In addition to introducing many new requirements and guidelines, the Rules also strengthen and reinforce a number of existing CBRC policies. The Rules are the latest in a series of policy and enforcement measures taken by Chinese financial regulators to address financial and systemic risks. This article deals with some implications for foreign banks in china, including irregular and improper behaviors in the industry, package of tough new measures, key objectives and outcomes and how banks can better manage risks and so on.

The explanation of Beijing’s Answers to Questions Concerning the Application of Law in Adjudication of Employment Disputes was published on the 24th of April 2017. This article will analyze and give comments on some questions and answers listed by it. Such questions will be answered, and they are what circumstances constitute “major changes in objective circumstances” , how to the termination of an employment contract when an employee severely violates employment disciplines or professional ethics, how to the return of special benefits when an employee terminates the employment contract prematurely and how to determine the vality of a fixed-term employment contract if it is an open-ended employment contract.

The explanation of Beijing’s Answers to Questions Concerning the Application of Law in Adjudication of Employment Disputes was published on the 24th of April 2017. This article will analyze and give comments on some questions and answers listed by it. The answer to the statute of limitations for payment of annual leave which is to be calculated from December 31 of the following year, to how to decide the amount of an employee’s salary and to the clarification of the calculation of overtime pay will be analyzed.

Enterprises’ management over employees is by no means limitless, but is, to varying degrees in different circumstances, restricted by employees’ individual rights. For example, the law provides that an employer can ask an employee for information directly related to the employment contract, but if an employer requests information beyond this category, such as personal medical records or parent information, it may be considered a violation of the employee’s privacy. However, although privacy is a statutory right of citizens, its scope and content always vary with the changes of a person’s social roles. For instance, the scope of an individual’s privacy towards his or her family is narrower than that towards strangers. So, based on the personal dependency characteristics of employment relationships, to what degree should employees’ privacy rights be subject to employers’ management? This article will study different cases to analyze and discuss how to draw a line between enterprises’ management and employees’ privacy.

With the Belt and Road initiative likely to drive significant outbound investment by Chinese companies, the ability to enforce foreign arbitral awards in the People’s Republic of China (PRC) will be a key issue for these companies and their Belt and Road counterparties. In 1987, the PRC ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). On 10 April 1987, the Supreme People’s Court of China (Supreme People’s Court) issued the Notice of the Supreme People’s Court on Implementing the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Acceded to by China (Supreme Court Notice) and stated relevant issues regarding the enforcement of foreign arbitral awards according to the New York Convention. However, the Supreme Court Notice contains only five articles which set out the principal rules according to the New York Convention. As of today, the Supreme Court Notice has not been amended. Due to the lack of detailed explanation and case precedents, this article will analyze the issues an applicant seeking to enforce a foreign arbitral award in the PRC should have to focus on.

“Big Data”, one of the hot topics in recent years, has been widely discussed. The impact of “Big Data” on competition interests both practitioners and scholars. The major concern from antitrust perspective is whether “Big Data” could facilitate monopoly, especially in the platform economy where data could be easily accessed or collected by platforms from multiple sides of the market. The purpose of this article is to review the role of data in different stages of platform development and analyze the possibility of monopoly based on the interplay between data and platforms. This article will also discuss when and how authorities should intervene with the anti-competitive behaviors in the platform economy driven by “Big Data” in different scenarios.

SAP SE (the Plaintiff), founded in 1972 and headquartered in Walldorf, Germany, is the largest provider of enterprise management and collaborative commercial solutions in the world. SAP SE compiled a series of textbooks corresponding to modules of software that explain interfaces and terms. SAP SE holds the copyright to the software as well as the textbooks for training. Chinese enterprise, Langze, offered training sessions on modules of SAP software on a large scale. In March 2015, on behalf of SAP SE, KWM filed a lawsuit against Langze and others with the Shanghai IP Court. When SAP SE went all out to provide evidence, and in the absence of evidence to the contrary from Langze, it was exactly based on this principle of full compensation that the colliagiate bench accepted reasonable evidence from SAP SE and went beyond the statutory ceiling. By doing so, it both recognized the value of the copyright holder’s work and effectively deterred Langze from further infringement – a perfect show of muscle by IPR protection authorities. After the case was closed, many other training institutions that infringed upon SAP SE’s copyrights ceased their infringements, a demonstration of the exemplary power of this case. Shanghai IP Court’s effort to protect foreign copyright holder’s rights in this case was also commended by SAP SE’s executives and international counterparts.

French fashion designer Christian Louboutin is famed for his iconic red-soled shoes, which are spotted on the feet of numerous domestic and overseas stars at red carpet events. This world-class designer is also known for his unique bullet-shaped lipsticks which are counterfeited in China. The imitated lipsticks were sold online at an extremely low price even before distribution of official products began in China. The uniquely shaped Christian Louboutin lipstick was granted design patents in China so there was no doubt as to the ruling of the Court regarding the copying of the design. The question was whether justice upheld by the favorable result after the long-lasting proceedings (6 to 12 months) would be too late. In the Chinese market where the new patented lipstick had not yet debuted, yet the market was inundated with counterfeits, time would decide the value of the design. In this case, the traditional approach was abandoned, and the preliminary injunction before the Guangzhou Intellectual Property Court was applied for.

At the end of 2016, KWM’s IP Litigation Group obtained favorable judgements for its clients in “Ariston Case” and “John Deere Case”, two typical disputes concerning infringement of well-known trademarks by ordinary registered trademarks. The two cases are respectively included in the “Top 10 Cases Concerning IPR Judicial Protection Heard by Courts in Jiangsu in 2016” and the “Exemplary Cases in Terms of ‘Strengthening the Judicial Protection on IPR’” at the occasion of the 2nd anniversary of the Beijing Intellectual Property Court. Based on these two cases, this article introduces and explains the evolution and development of judicial interpretations and practice relating to the protection of well-known trademarks, and therefrom draws conclusions and trends about certain adjudication rules in China.

China’s Cybersecurity Law (the “CSL”) was approved in November 2016, and took effect on June 1st, 2017. Being the first legislation devoted to cyberspace, this legislation governs the establishment, operation, maintenance and use of cyber networks within China and the supervision and management of cybersecurity. The Cyber Administration of China (CAC) is the principal governmental authority supervising and administering the CSL and cybersecurity regime. In conjunction with the CSL, CAC recently published a series of supplementary implementation measures, including the Measures for the Security Review of Network Products and Services (Provisional) (the “Security Review Measures”), Public Opinion Draft of the Measures for Evaluating the Security of Transferring Personal Information and Important Data Overseas (the “Draft Data Transfer Measures”), the Measures on Administrative Law Enforcement Procedures for Internet Information Content Management, as well as some rules governing internet news information services (collectively the “Implementation Measures”). Most of the Implementation Measures are set to come into force with the CSL on June 1st, 2017, but further measures will be forthcoming. Despite the uncertainties and ambiguities of certain key terms and clauses, the changes that the CSL brings to China’s cybersecurity landscape will definitely be beyond all expectations. Companies potentially affected by the CSL should keep a close eye on issuance of related guidelines, implementation rules, and the further development in China’s cybersecurity regime.

The PRC government continues to set the stage to develop self-driving cars. The latest salvo took place on 13 June 2017 when the Ministry of Industry and Information Technology and the Standardization Administration of China jointly issued draft Guidelines for the Establishment of National Standards System of Telematics Industry (Intelligent & Connected Vehicles) (“Draft Guidelines”) for public comment. The Draft Guidelines aim to establish national standards for China’s Intelligent & Connected Vehicles so the standards system can play a leading and supportive role in the development of China’s ICV industry. The Draft Guidelines show China government’s ambitions in this regard and that the efforts to boost the development of China ICV are being driven forward by the very highest levels.The Draft Guidelines outline the overall requirements to establish a standards system, the way in which the standards system should be structured, framework and detailed contents for such standards system and implementation. This article will analyze the key points of the Draft Guidelines.

China is the promised land for many international Network Marketing companies, and China has what Network Marketing companies thrive on. Over 40% of Chinese customers favor international health brands and 9 out of the top 10 cosmetics companies in China are international. However, it is very important to note that despite this opportunity network marketers do face real and serious challenges in China. The Network Marketing companies that insist upon using their traditional business models have the choice of operating non-compliantly in China and face great risk or wait outside and possibly miss out on a great opportunity. The Network Marketing companies that have seized the opportunity and operate non-compliantly within China may be building a large, profitable company but this company may be built upon sand and will collapse in an instant. These Network Marketing companies should consider whether they can legitimize their operations by obtaining a Direct Sales License or by restructuring its business operations so as to be compliant with PRC laws.

Today, MSCI Inc. (“MSCI”) announced the results of its 2017 Annual Market Classification Review, including its decision on its proposed inclusion of China A-shares in its MSCI Emerging Markets Index and other major global indexes. This is yet another important breakthrough for China’s equity market and for global investors. Investment funds and financial products tracking these indexes globally will now be mandated to invest in the China A-shares market from June 2018. MSCI will consider further inclusion of China A-shares in line with developments in the China A-shares market as against its market accessibility criteria, and subject to further consultation with global investors. This may be in terms of either or both an increased inclusion factor or the inclusion of Mid Cap China A-shares. MSCI has pointed in particular to the removal or relaxation of the daily limits on Stock Connects, decreases in the frequency and extent of voluntary trading suspension practices, and further deregulation of the financial product pre-approval requirements, as being key areas where developments will be carefully observed. This second article will outline the final implementation decision, the reasons behind MSCI’s decision to include China A-shares in its major global indexes, the impact the decision is expected to have and the next steps for inclusion.

“Invisible Waybills”: An Innovation to Better Protect Personal Information A recent news article about the debut of “invisible waybills” by S.F. Express (a major delivery services company in China) has attracted public attention. S.F. Express has introduced an “end-to-end entire process information security solution” which protects its customers’ personal information. S.F. Express is putting an “invisibility cloak” over the customer’s personal information, so it is not “naked” during the express service process, especially during internal processing and delivery. This move is supported by a whole set of innovative technology. It is reported that S.F. Express, as well as hiding or encrypting personal information, is also adopting integrated alternative technology, including identifying a customer by a virtual number, electronic receipt and address encoding. This technology will ensure that customers can be reached without exposing their personal information and will smooth the operation of its delivery services. S.F. Express has made a positive attempt in this regard. An enterprise’s legal obligations to protect personal information arising from and along with its adoption and development of new technology may be fulfilled by upgrading that technology and innovation.

Recently, the cyber ransomwares are rampant in the global cyberspace. Data leakage and network breakdown resulted from the viruses cause severe financial losses to network operators, and present a significant challenge in global cyberspace safety. In May, WannaCry Ransomware attacked over 150 countries, including the UK and Ukraine, and users in China were also influenced. When the world is still in the shadow of WannyCry, a new ransomware, which is regarded as a variant of Petya virus, has already spread across the world. The new ransomware has attacked the UK, Ukraine, Russia, Denmark and other countries. The newest Norton Cybersecurity Insights Report indicates that China is faced with the severest attack of cybercrimes among the countries in the emerging markets. This article will briefly introduce the structure of the Emergency Response Plan, and summarize the basic legal obligations of the companies mainly under the Cybersecurity Law and relevant regulations in preventing and responding to cybersecurity incidents. It will also provide experienced instructions on implementing the material steps for responding to cybersecurity incidents.

After MSCI’s recent announcement on the inclusion of China A-Shares in its Emerging Markets Index and other major global indexes, the inaugurated launch of the long-awaited Bond Connect scheme today marks another significant breakthrough in China’s capital market development, coinciding with the celebration of the twentieth anniversary of the formal establishment of the Hong Kong Special Administrative Region. Bond Connect is a new mutual access scheme for offshore investors to access the mainland China bond market (“Northbound Trading”) and for onshore investors to access the Hong Kong bond market (“Southbound Trading”) through a market infrastructure linkage between the mainland China and Hong Kong. The initial phase of Bond Connect only supports Northbound Trading. Southbound Trading will be explored at a later stage. This article will primarily examine the key features and legal issues relating to Northbound Trading.

“Internet of Vehicles” (IOV), also called the “intelligent connected vehicles”, as the name indicates, is a proposal to make automobiles and their functions networked and smart. It emerged in China in the 2010s and since then the number and diversity of applications and business scenarios have grown as the technology has developed. Car manufacturers benefit by putting in place IOV-related functions during the production stage. At an early stage manufacturers can develop, specific branded services for the product, install and test related software and hardware on vehicle mounted terminals , and thereby become more competitive and innovative, create a more reliable closed IOV ecosystem, maintain and build its brand and attractiveness, and protects its core technologies and IPRs. Some manufacturers are already doing so. This article will gives some tips for automobile manufacturers.

The Cybersecurity Law of the PRC (the “Cybersecurity Law”) and the Judicial Interpretations on Issues Concerning the Application of Law in Handling Criminal Cases of Infringing on Citizens’ Personal Information (the “Judicial Interpretations”), both coming into force most recently, dedicate a significant portion of the law to deal with the protection of citizens’ personal information. With a lower threshold for criminal conviction and much more detailed and specific provisions, these laws indicate the trend that China has been making growing efforts to protect citizens’ personal information and to crack down on the infringement of citizens’ personal information. Currently, banking regulators (such as the People’s Bank of China and the China Banking Regulatory Commission) are all emphasizing the protection of citizens’ (financial consumers’) personal information. Banks will unavoidably be engaged in a large number of activities involving personal information, whether in personal banking business or in corporate banking business, whether in existing business operation or in new market exploration. Therefore, to avoid criminal liabilities as the result of infringement of citizens’ personal information would be of extreme importance to banks operating in China.

The Catalogue for the Guidance of Foreign Investment Industries (2017 Revision) (the “2017 Catalogue“) was issued by the National Development and Reform Commission and the Ministry of Commerce on 28 June 2017. It will come into force on 28 July 2017 and the Catalogue for the Guidance of Foreign Investment Industries (2015 Revision) (the “2015 Catalogue“) will be abolished therefrom. Changes between the 2017 Catalogue and the 2015 Catalogue are mainly in two areas, namely structural adjustment by implementation of a “negative list”and fewer restrictions with more opening up. The 2017 Catalogue, together with the Special Administrative Measures (Negative List) for the Entry of Foreign Investment to Pilot Free Trade Zones (2017 Version) issued in early June, shows the Chinese government’s intention to open further, to use foreign capital actively and to improve the foreign investment environment.  By implementing the management model of pre-establishment national treatment with a negative list, new vigor and vitality will be brought to the development and growth of Chinese economy. The 2017 Catalogue has several new items in the encouraged category such as Foods for Special Medical Purposes, Virtual Reality and Augmented Reality (AR) equipment, and key functional parts of Three-dimensional printers. It’s easy to see that innovation-driven development and structural optimization of industries will be important in improving the competitiveness of Chinese manufacturing in the new era.

Multilateral development banks, such as the World Bank, enforce strict compliance procedures for their borrowers, along with regulations on investigations and sanctions for non-compliance. Being blacklisted by these banks has significant negative consequences. Taking an active role in proceedings may prevent an enterprise from being sanctioned. The World Bank provides guidelines on establishing a compliance management system in its Integrity Compliance Guidelines. Chinese enterprises participating in the Belt and Road Initiative or other overseas projects should utilise compliance programs as a means of protection against compliance risks. This will allow enterprises to make the most of all the possible opportunities along the Belt and Road.

On May 14th and 15th, the Belt and Road Forum for International Cooperation was held in Beijing, which once again put the city at the centre of global attention. China is a founding member of the Belt and Road (“B&R”). It already has more than 80 state-owned enterprise (SOEs) setting up branches in countries along the B&R and 47 SOE’s participating in 1676 construction projects. The B&R presents both opportunities and challenges to Chinese enterprises. Chinese firms will need to meet high standards to avoid breaching compliance requirements. Most countries along the B&R are developing countries in economic transition. They are high-risk zones for compliance issues. Chinese enterprises participating in the B&R Initiative will need to uphold the host countries’ legal regulations, the United Nations Convention against Corruption, and international organizations’ anti-corruption regulations. This makes the regulatory environment diverse and complex. In summary, both domestic and international communities are calling for better compliance governance from Chinese enterprises.

On 30 July 2017, a beautiful sunny Sunday in midsummer, without expectation the Ministry of Commerce (“MOFCOM”) issued two documents relating to foreign investment in China. This was only two months after MOFCOM released draft measures. The inclusion in the record-filing system of foreign mergers and acquisitions not involving special access administrative measures (negative list) and related-party M&A signals that foreign investment in China has entered an era known as the “Pre-establishment National Treatment (PENT) and negative list”. Since China is taking a more open, transparent and market-oriented attitude to foreign capital, market players and participants should embrace changes and respond to challenges with an open mind. Foreign investors are encouraged to continue to increase their investment by introducing more high-end, intelligent and greener projects in China.

For much of its short history, Bitcoin’s turbulent growth has remained relatively unbridled by regulations or laws. The past 12 months have been no less explosive—investors in Bitcoin have enjoyed the cryptocurrency’s greatest period of growth since its inception in 2009. Many jurisdictions are now establishing regulatory frameworks to deal with the risks of cryptocurrency, and these have the potential to significantly limit the way cryptocurrencies are purchased and traded. This regulatory reform, ranges in intrusiveness, from simple record-keeping requirements to strict licensing regimes, like the BitLicense scheme implemented in New York. Recently, China is looking to more tightly regulate Bitcoin; however, as of now, the only Bitcoin related regulation in China is the Circular of the People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission on the Prevention of Risks from Bitcoin promulgated in 3 December 2013. In many ways, these new laws are beneficial to the development of the technology. But they also stand to radically change the way Bitcoin is used. Changing rules call for a changing approach by Bitcoin investors, particularly for those based or interested in China.

In today’s mobile internet era, social media channels such as Weibo and WeChat have become an essential tool in most enterprise companies’ marketing arsenals. However, enterprises often fail to pay enough attention to copyright issues when operating their official accounts. The 2016 White Paper on WeChat Intellectual Property Protection, released by Tencent, shows that there were more than 13,000 intellectual property complaints relating to WeChat during 2015, of which more than 40% were copyright-related. The number of copyright lawsuits is also growing fast in China’s social media space. In a recent matter, Visual China Group (VCG), a leading visual content provider, sued Tencent for RMB 180,000 for using 9 images without acknowledgement. The court handed down a decision ordering Tencent to pay VCG RMB 40,000 in the end, and the case generated a high level of public interest. It is important to note, however, that the speed and fragmented nature of social media imposes new challenges for the application of copyright law in China. This article will analyze how to prevent inadvertent copyright infringement on enterprise social media accounts.

Insider trading had always been the closely focused subject of the China Securities Regulatory Commission (the “CSRC”) in the recent years. In 2017, it became the top priority of the CSRC. According to the Bulletin of the China Securities Regulatory Commission Regarding Cases Handled in H1 2017, in the first half of 2017, the CSRC launched a total of 302 preliminary/formal investigations, 140 of which were new insider trading cases, making up 46% of the total number of investigations. Among these new insider trading cases, the CSRC initiated preliminary investigations into 104 of them and filed formal investigations into 36. In addition, on 7 July 2017, the CSRC issued the third batch of cases under investigation, with a heavy focus placed on insider trading. This article will analyze the new features in recent insider trading cases, administrative penalty on insider trading cases in the first eight months of 2017 and transfer to criminal prosecution and conviction of recent cases.

Over two months has passed since the Cyber Security Law of the People’s Republic of China (Cyber Security Law), a fundamental law in cyber security, took effect. Such a short period of time saw numerous changes: in legislation, implementing regulations dealing with “personal information protection”, “security assessment of cross-border transfer of personal information and important data” and “protection of critical information infrastructure (CII)” are under formulation; in law enforcement, regulatory authorities are taking resolute efforts to implement the Cyber Security Law, with specialized law enforcement campaigns in various places. Meanwhile, conflicts among network operators arise among others, in relation to ownership of personal information and data owners. All circles of the society are focusing on development in regulations associated with the Cyber Security Law and in law enforcement. Against this background, this article streamlines and summarizes key facts in “personal information protection”, “CII” and “network operation security” after the Cyber Security Law took effect.

Against the backdrop of cyber security law, updated privacy policies, do they live up to the hype? Quite a few major internet giants in mainland China, apparently encouraged by regulatory authorities, have put in considerable efforts in recent months to update their privacy policies. It appears that the relevant regulatory authorities have completed assessing the updated policies. These updated policies are likely to be viewed as having a certain effect in setting a precedent or benchmark for personal data compliance in mainland China. While this undoubtedly represents a significant improvement in personal information protection, it is also worth to examine certain key details based upon, needless to say, some of the updated policies available in the public domain.

On 1 August 2017, Guangdong High Court published the Explanation about Difficult Issues in Adjudicating Labor Disputes (“Explanation”). This is Guangdong High Court’s third judicial opinion on labor disputes since the Employment Contract Law’s entry into force in 2008. This Explanation consists of 23 sections, which can be divided into five groups, including determination of employment relationship, claims and liabilities in connection with the performance of employment contract,  grounds for termination of employment contract, judicial procedures and work-related injuries and non-work-related death. This article will analyze the determination of employment relationship in work-related injuries and new trends in work-related injury compensation.

How to determine the persons responsible for work safety in enterprises? The situations in practice are usually more complicated than those indicated in the laws. After further research on the responsible party of work safety, the judicial and law enforcement departments find that in addition to the above, it is also possible that the person who has the actual decision-making power with respect to production and management does not assume any position in the enterprise. Under this circumstance, the person is unlikely to be held accountable through application of the provisions relating to “chief person in charge”. On June 23rd, 2017, the Letter Regarding Request for Comments on the Work Safety Law of the PRC (Amendments Proposal) was issued, which proposed to adjust and modify some provisions of the original Work Safety Law. Article 5 of the published Work Safety Law of the PRC (Amendments Proposal) further specifies that the chief person in charge of a production and business operation entity (including legal representative, actual controller, the same below) is the first person responsible for the work safety of this entity, and shall assume the overall responsibility and liability for the work safety of the entity.

On October 10 2017, the China Food and Drug Administration (“CFDA”) issued the Decisions Concerning the Adjustment of Imported Drug Registration (No. 35 Order by CFDA, “Decisions”). This implements the policy of encouraging new drug marketing following the earlier issuances of Opinions on Deepening the Reform of Evaluation and Approval System and Encouraging the Innovation of Drugs and Medical Devices by the General Office of the CPC Central Committee and the General Office of the State Council on October 8. This article will analyze the three major issues affected by the Decisions, including synchronized declarations of research & development for multi-regional clinical trials are permitted, the application for import marketing registration directly of drugs in MRCT and the removal of certain import drugs’ overseas marketing requirements.

Recently, represented by Ken Wu, Chinese Ambassador to the Netherlands, China officially signed the Hague Convention of 30 June 2005 on Choice of Court Agreements (“the Convention”). The Convention is an international treaty that legally binds Contracting Parties to a uniform set of rules relating to civil and commercial matters. It currently has 33 Contracting Parties, mostly EU member states (excluding Denmark). Ukraine, the U.S. and China have not yet ratified the Convention under domestic law. We are still waiting for China to announce whether it has reservations about any of the provisions. This article will analyze the three main rules established in the Convention.

The Asian Infrastructure Investment Bank (AIIB) is a multilateral financial institution that aims to bring financial support to infrastructure building in Asia. Certainly, AIIB will play an important role in the Belt and Road related projects. To ensure that the funds are used for their intended purposes, the AIIB strictly polices misconduct such as fraud and corruption. The AIIB reflects the values of the World Bank in regards to inappropriate behavior, investigatory measures, and sanction policies. The AIIB also actively participates in cross-debarment by voluntarily adopting the list of sanctioned firms and individuals under the Agreement for Mutual Enforcement of Debarment Decisions which was actioned by the World Bank and four other multilateral development banks.

The Measures on the Due Diligence of Non-resident Financial Account Information in Tax Matters (the “CRS ”) are now in place, six months after the release of the draft for comment (the “Draft”). The Common Reporting Standards Regulations made little change to the Draft besides some improvements in wording and concepts, and a delay in promulgation. This article focuses on three amendments, namely U.S. dollars as the currency, Anti-money laundering identification procedure fully included and Improved regulatory regime. In response to the upcoming individual income tax reform, this article summarized the key points of the CRS Regulations.

The Chinese patent litigation market is currently booming, with one key driver behind this boom being that many foreign entities and multinational companies are now pursuing enforcement of their patents in China because of a perception that the Chinese government has created an increasingly attractive environment for patent enforcement, as symbolized by, among others steps taken, the recent establishment of specialized IP Courts in Beijing, Shanghai and Guangzhou. These entities/companies, though increasingly enthusiastic and optimistic about patent enforcement in China, are generally not familiar with the Chinese legal system and may have concerns about local protectionism and uneven application of the law. This article will analyze a list of questions most frequently asked by our clients in relation to patent litigation in China, and provide some basic and preliminary answers thereto.

On 14 June 2017, Hong Kong’s Legislative Council passed the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016 (“Third Party Funding Bill“), amending the Arbitration Ordinance (Cap 609) (Ordinance) (“AO”) to permit third party funding of arbitration proceedings seated in Hong Kong.As Hong Kong prepares to implement the reform (which is expected to take effect in late 2017), this article will take stock of some of the key features of the Third Party Funding Bill and what its passage will mean for users of Hong Kong arbitration. This article will also make comparisons with third party funding of arbitration in England and Wales to determine what practical lessons can be learned from the reform process in that jurisdiction.

China UnionPay is a bankcard association in China which plays a core and pivotal role in China’s bankcard industry. UnionPay operates an inter-bank transaction settlement system through which the connection and switch between banking systems and acquirers as well as the inter-bank, cross-region and cross-border usages of bankcards issued by associate banks is carried out. In May 2014, China UnionPay found that a company, Jinan Daonuo Information and Technology Co., Ltd. (“Jinan Daonuo” ) was providing acquiring outsourcing services of acquiring fraudulently using the UnionPay name, including counterfeiting UnionPay’s authorisation documents in its operation, and using UnionPay’s three-color brand logo, the Chinese and English names of “UnionPay” and the “UnionPay” registered trademark on its POS machines and in the relevant acquiring service. Jinan Daoduo established many branches and conducted operations in Jinan, Shanghai, Wuhan, Chongqing, Chengdu, Nanjing and other areas. The actual controller of Jinan Daoduo also established Shandong Yuntai Mingde Information and Technology Co., Ltd. to commit the infringement. This article will analyze the significance and social Impact of this case.

China’s evolution into the world’s biggest marketplace has led to many international brands re-thinking their China strategy. For many this means taking back their distribution channel within China. In most cases this will only be done successfully by acquiring the business of the distributor. A dispute with a Chinese based distributor will unlikely turn out to be anything other than disruptive and damaging to the brand’s business in China. If poorly done the result can be litigation; disruption to business; dumping of the brand’s stock and great cost to distributor – very much a lose/lose outcome. Accordingly for many international brands the only route forward is to buy out its distributor. The good news is that in our experience once the international brand has acquired its distribution channel in China then the business rapidly improves. The difficulty is the actual acquisition – in this regards careful planning, drafting and execution are key to a successful transaction.

The development of advanced automated vehicle safety technologies, including fully self-driving cars, will be the greatest change to personal transportation since the introduction of the personal automobile nearly a century ago. Although humans love cars they do not seem to be particularly adept at driving. Surveys have found that some ninety percent of motor vehicle crashes are caused at least in part by human error. Accordingly moving the driving from humans to autonomous vehicles may improve safety and save lives. As with every ground breaking technology, automated vehicle technologies have the potential to bring great social, economic and environmental benefit but will also lead to new legal issues that will need to be considered. Perhaps the most basic and most important is in respect of liability. As driving functions become increasingly automated there will be a shift of responsibility from driver to vehicle. The question, will then arise as to who bears responsibility if there is a collision occurs – the driver? The owner? The manufacturer? The automation system provider? Or the insurance company? Or do they share liability and if yes then to what extent? This article seeks to provide some preliminary views on liability issues relating to automated vehicle technologies and how this is likely to develop in China.

On 18 August 2017, as part of the Chinese government’s ongoing efforts to regulate overseas investments by Chinese companies, China’s State Council published a set of investment guidelines (Guidelines) formulated by four key regulators – the National Development and Reform Commission, Ministry of Commerce, People’s Bank of China and Ministry of Foreign Affairs (collectively, PRC Regulators). The Guidelines provide the most important clarification on Chinese outbound investments since late 2016, when Chinese authorities first clamped down on so-called “irrational” or “non-genuine” investments. Market uncertainty and a decline in Chinese outbound investments followed. Significantly, the Guidelines provide official clarity by classifying overseas investments into three main categories, namely encouraged investments, restricted investments and prohibited investments. This Guidelines are a timely and positive development, which we expect will result in Chinese outbound investments returning to the pre-2016 levels, especially in the “encouraged” category which is likely to enjoy quicker and more efficient regulatory approvals. They represent a reassuring endorsement of China’s Go-Global initiative in the wake of recent uncertainty. This article provides an overview of the key takeaways from the Guidelines.

US network marketing companies like Herbalife, Nu Skin and Usana Health Sciences have been brutally reminded that a successful China story can quickly move from being a strength to a vulnerability depending upon the mood that prevails in China. The recent multi-level marketing (“MLM”) crackdown in China coupled with a joint announcement by several PRC authorities launching a number of investigations which have led to a tailspin in the share price of major international MLM companies that have a large exposure to China. At present most international MLM companies operating in China would be best advised to maintain a low profile at present. This means no press releases, no public statements but rather be calm and just sit out the storm. Communications to affiliates or the market may be misinterpreted and may not calm but rather attract attention. In these uncertain times international MLM companies should ensure that their business model is compliant and ensure a robust compliance model is in place in order to deal with any non-compliant practices or affiliate actions that may attract the attention of the authorities.

2017 has been a busy year for Chinese regulators with the CBRC, CSRC and CIRC issuing dozens of decrees, circulars and rules aimed at cleaning up the country’s financial markets and controlling its financial risks. In particular, CBRC issued 8 circulars in just a few days from late March to early April, launching a strong regulatory campaign in the banking sector against what is known as the “3 (three types of violations) 3 (three types of arbitrages) 4 (four types of improper conducts)”. Under this CBRC regulatory storm, all commercial banks in China are subject to CBRC onsite inspections and are required to conduct self-examinations in order to identify malpractice and non-compliance in their business operations. Most self-examinations and onsite inspections were completed by the beginning of July. Since then, CBRC local offices have imposed, and are continuing to impose, penalties on commercial banks for their identified malpractice and legal non-compliance.

On 31 August 2017, Redleaf made a sudden announcement that it would be relocating its services to a different location at the request of the government. Since 2012, the State has allowed the military to lease unused land subject to approval. It is speculate that the awkward situation that Redleaf was confronted with may be the result of not following the correct procedure. Investors and operators of medical facilities in China should not neglect the risks and high costs associated with non-compliance in the establishment process. In order to avoid unnecessary loss and to ensure continuous operation, investors should seek legal guidance. It is vital to conduct comprehensive due diligence around land, regulations and operation, to avoid unnecessary risks.

Administrative oversight on cross-border e-commerce (including finance, commerce, customs, customs inspection, foreign exchange, tax, etc.) is also undergoing a process of change. In this process, there has emerged much controversy over the legal nature of and liability related to cross-border e-commerce. There is a large degree of uncertainty regarding this newly developed mode of business operation, which is constantly discussed by theorists and practitioners. This article will firstly introduce the definition and import trade modes of cross-border e-commerce. What follows is a legal analysis on the possibilities of suspected smuggling of cross-border e-commerce service providers under different cross-border e-commerce business models. This article intends to provide some comments on the compliance of cross-border e-commerce, its daily operations and how to avoid litigation risks.

In recent years, cross-border corporate investigations have been on the rise. Foreign law enforcement authorities and lawyers have become increasingly familiar with the Chinese legal environment. Corporate investigations in China in terms of targets, approaches and scales are no longer lost missions. Cross-border corporate investigations require cooperation of multiple parties at home and abroad. The amount of investigative information is enormous for all parties to share. Therefore, the PRC legal counsels who jointly participate in the investigations, have the highly important task of screening out information which potentially involves “State Secrets” and personal information. Chinese lawyers should take a different approach to the same material. Firstly, no document potentially containing state secrets can be transferred abroad – regardless of whether or not it is related to an investigation. Companies should obtain an employee’s express consent at the start of employment to disclose their name, position, office number, work email and other information related to the company when necessary. But the company should assure employees of their personal information security. For example, that the company will keep all personal sensitive information confidential.

On 21st July 2017, the Wuhan Maritime Court issued a maritime injunction ordering a foreign ship owner to apply to withdraw an anti-suit injunction of the Hong Kong High Court against a Chinese insurer. This is the first case to reveal the Chinese court’s attitude towards the anti-suit injunctions of “foreign” courts. The use of the maritime injunction as an anti-anti-suit injunction is a “creation” of the Wuhan Maritime Court, for use in situations where there is no such possible injunction under Chinese law. Other maritime courts may follow this approach in similar cases, or even develop the maritime injunction into an anti-suit injunction to prohibit foreign proceedings. However, we do not expect it will expand into the (non-marine) commercial domain because there is no other similar injunction in civil procedural law. Remedies in other areas will depend upon the development of domestic legislation. The Belt & Road initiative will create closer relationships between foreign and Chinese companies. Competition over jurisdiction will be unavoidable. In such circumstances, we expect that Chinese courts will use maritime injunctions (or more general civil injunctions) to protect a Chinese entity’s procedural rights. Our advice to foreign entities if such a situation arises is to explore their options. Perhaps they have grounds to have a Chinese court overrule either an anti-suit or an anti-anti suit injunction.

On 30th June 2017, the Intermediate People’s Court of Wuhan, Hubei Province (‘’Wuhan Intermediate Court’’) handed down its judgment in Application to Recognize and Enforce a Foreign Civil Judgment by Liu Li v. Tao Li and Tong Wu” (2015 E Wuhan Zhong Min Shang Wai Chu Zi No. 00026) (“Judgment”) in which the Court considered the recognition and enforceability of a foreign judgment in China. For the first time, the Court, on the basis of acknowledging juridical reciprocity between China and the US, ruled that a US civil court ruling was to be recognized as legally binding on Chinese soil. The case concerns a shares transfer agreement (‘’Agreement’’) dispute between the Applicant Liu Li (‘’Applicant’’) and the Respondents Tao Li and Tong Wu (‘’Respondents’’). During the hearing of the case, the Wuhan Intermediate Court reviewed the documents submitted by the Applicant relating to the recognition and enforcement of a Chinese civil ruling by the United States District Court for the Central District of California. The Wuhan Intermediate Court concluded “after scrutiny, it is found that the materials submitted by the Applicant proves there is precedence as to recognition and enforcement of civil rulings of Chinese courts in US, so reciprocity for mutual recognition and enforcement of civil rulings is determined existing between the two countries.”

Enterprises and the general public are becoming increasingly aware of their intellectual property (IP) rights as well as the need to protect them. Remedies for IP infringements are commonly obtained from civil lawsuit and complaint to administrative authorities seeking investigation and punishment. In severe infringement cases, an action may even be brought by the IP owner in the criminal court. This article will look at the ways IP owners could do to assist the authorities to hold infringers criminally accountable.

In October 2017, the China Food and Drug Administration (“CFDA”) released a series of documents regarding reform of China’s drug administration system. This new patent linkage system (“PLS”) is discussed in two important documents: Opinions on deepening the reform of the examination and approval system and encouraging the innovation of pharmaceutical and medical devices (“the Opinions”) issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council on 8 October 2017; and A revised draft of Provisions for Drug Registration (“the Provisions”) issued by CFDA on 23 October 2017. The PLS links the registration procedure of a generic drug for marketing and patent rights. The Opinions and the Provisions signal an acceleration of the enforcement of the PLS in China, although complete enforcement might still take one or two years.

In order to deepen the reform in the field of drugs, the China Food and Drug Administration issued the Drugs Administration Law (Draft for Consultation) (“Draft”) on 23 October 2017. The Draft incorporates and reflects material contents in the reform of drugs field in recent years, including fully implementing the Marketing Authorization Holder system, cancelling certificates of Good Manufacturing Practice and Good Supply Practice, carrying out records management for clinical trial institution and emphasizing legal liabilities on relevant entities in drug research and trial.

The Chinese government has announced that it will ease or remove restrictions on foreign ownership of Chinese securities and futures firms, fund managers, commercial banks, financial asset managers, life insurers and certain other financial institutions. Subject to certain transition periods, these changes will allow foreign investors to own a majority and eventually a 100% stake in many types of Chinese financial institutions. The announcement therefore represents one of the most significant steps China has taken to further open up the financial sector in the world’s 2nd largest economy. The announcement only sets out the Chinese government’s high-level policy direction, and the relevant Chinese financial regulatory authorities will soon issue specific implementing rules in accordance with Chinese laws and regulations.

On 4 November 2017, the 30th Meeting of the Standing Committee of the Twelfth National People’s Congress of the People’s Republic of China passed an amendment to the Anti-Unfair Competition Law of the People’s Republic of China (“Anti-Unfair Competition Law”), which will come into effect on 1 January 2018. This is the first major amendment to the Anti-Unfair Competition Law since its implementation in 1993, and it will have a significant impact on businesses in China. This article will analyze the main amendments to the Anti-Unfair Competition Law.

On 4 November 2017, the Anti-Unfair Competition Law Amendment was ratified by the Thirtieth Meeting of the Standing Committee of the Twelfth National People’s Congress after three rounds of review. It will come into effect on 1 January 2018. It has greatly improved the Anti-Unfair Competition Law which was enacted back in 1993. Commercial bribery, as an integral concern of the AUCL, has been in the spotlight during the amendment process. This article will analyze changes in the recipient of commercial bribery, state-owned enterprises and private enterprises standing on equal ground and requirements of booking expressly remained.

The Department of Foreign Capital and Overseas Investment of National Development and Reform Commission released the new Administrative Measures for Overseas Investment (draft for public comment) (“New Measures”) and drafting instructions on their official website on 3 November, 2017. This consultation period, during which the public can give their opinion, ends on 3 December 2017. The New Measures contains six chapters and 66 articles. There are several major changes from the Administrative Measures for the Verification and Record-filing on Outbound Investment Projects. The regulation’s name change indicates that regulation of foreign investment will no longer be limited to pre-transaction “verification” and “record-filing”, but also covers interim and ex post supervision.

To increase the quality and efficiency of trademark examinations, China Trademark Office has recently introduced new facilitation measures and plans for trademark registration, including: implementing electronic issuance of documents, speeding up the examination process, reducing the time allowed to oppose or provide supplementary evidence and introducing the obligation to provide proofs of use after registration. These facilitation measures will further reduce examination time, streamline examination process to increase efficiency, promote full digitisation of trademark application and promote the following changes in the law to simplify conditions for application acceptance and examination.

After 24 years, the Law of the People’s Republic of China against Unfair Competition (hereinafter referred to as “Anti-Unfair Competition Law”) was finally ushered into a new chapter. On November 4, 2017, the new Anti-Unfair Competition Law was passed by the NPC Standing Committee and released on the same day. It will be effective on January 1, 2018. Among all the highlights in the latest law, the new regulation on operators’ commercial bribery is one of the most eye-catching changes. Apart from paragraph 1 of Article 7, which limits the scope of bribery, paragraph 3 of Article 7 also includes the condition that an operator is defined as not constituting commercial bribery, that is, “The bribery committed by an employee of a business operator shall be deemed as conducted by the business operator, unless otherwise evidence given by the operator shows that such bribery is not related to seeking a business opportunity or gaining competitive advantage for the business operator.” This provides one possibility for operators to reasonably be exempted from the administrative or even criminal legal liability for commercial bribery.

Recently, the Legal Affairs Office of Sichuan Province released the Amended Draft Regulation of Sichuan Province on Protection of the Rights and Interests of the Elderly (Draft for Comments). This regulation provides that “for an only child whose parent is over 60 and hospitalized, an employer shall support the only child in taking care of the parent and offer no less than 3 days’ paid elderly care leave per year. The salary and benefits during such leave shall remain unchanged.” The only child elderly care leave then stimulated wide discussion. Sichuan province is not the first to come up with this idea and issue this regulation. Sincethe Law of the People’s Republic of China on Protection of the Rights and Interests of the Elderly was amended in 2015, several local regulations were issued to protect the rights and interests of the elderly and solve the problems of pension and medical treatment. Duration of the leave in Henan Province is the longest followed by Hubei Province. While Hubei sets no ceiling on length; therefore, if an employer approves, the length of the leave in Hubei Province could be longer than that in Henan Province. Furthermore, the conditions for the leave in various regions are basically “being an only child family”, “parent over 60 and in hospital” with salary and benefits remain unchanged during leave. However, there are still worries about whether the leave they need will come true. This article will analyze some basic questions of regulations in different regions.

The conclusion of the 19th National Congress and President Trump’s visit in no way marks an end to China’s economic reform program. China’s 13th Five-Year Plan outlined the necessary changes to transform China into a high-end manufacturing economy and to encourage investment into service industries. In the future, China is likely to implement more reform to nurture innovation and entrepreneurship, and to allow market forces to play a greater role in efficiently allocating resources within the economy. Directors of companies with expertise in relation to technology, digital innovation, services, investments, and in the financial and capital market sectors in particular should assess what opportunities the reform program will mean for them. With sufficient fact-based preparation, patience, and the right relationships, doing business with China is likely to become even more rewarding.

China has been at the forefront of a number of recent developments in the dispute resolution space. One notable development is the announcement by the China International Economic and Trade Arbitration Commission (CIETAC) of its new rules governing the arbitration of international investment disputes (Rules) and the CIETAC Investment Dispute Resolution Centre in Beijing, the default centre to administer those Rules. According to CIETAC’s Secretary-General, the Rules seek to “fill the gap” in the area of Chinese international investment arbitration and develop and promote the international investment arbitration practice in China. The Rules are intended to support Chinese companies “going out” in furtherance of China’s Belt and Road initiative and to support the independent and impartial resolution of international investment disputes between investors and host countries. The Rules are also intended to provide an alternative for Chinese investors who may be concerned about potential bias against them in offshore forums due to a lack of understanding of Chinese law and practice. The Rules retain traditional arbitration characteristics such as flexibility, efficiency, and economy but incorporate elements of both Chinese and international arbitration law and practice. How the Rules will be adopted in practice, however, remains to be seen.

On 24 November 2017, the Ministry of Human Resources and Social Security of the People’s Republic of China issued the fifth list of documents to be annulled. The Measures for Severance Payment due to Violation or Termination of Employment Contracts (“No. 481”) is in this list. This marks the official departure of the nearly 23 year old No.481 from the historical stage. However, “sub-calculation of severance payment” will not be changed fundamentally. In the “post-No.481 era”, we do not expect fundamental changes to sub-calculation rules. Local rules regarding sub-calculation that have been established in various regions will remain unchanged unless modified officially by competent authorities. No. 481’s special rules for severance payment no longer apply to years of service after 2008. Although No. 481 has been annulled, and the Employment Contract Law is silent about medical treatment allowances, this does not imply that the medical treatment allowances system is abolished.

This article focuses on whether an enterprise could invoke the “force majeure” clause in the business contract as a reasonable excuse of failure to perform obligations if it is ordered to stop production due to the environmental protection problems, and how to prevent and reduce the risk for supply-chain breaking due to the environmental protection problems. First of all, if an enterprise is ordered to stop production by the government because of its own violation of environmental laws and regulations, a court will not order that force majeure is a ground of reasonable excuse of failure to perform obligations, the reason is that the enterprise has the responsibility to obey the law. Secondly, if the enterprise obeys the law, the government orders the enterprise to stop production due to the contingency plans for heavily polluted weather, and the enterprise alleges this shall be a force majeure, it is still very unlikely to be supported by the court. In practice, a lot of companies select the suppliers and review their compliance in a very simple and basic way. With the rapid change of laws and regulations in the field of environmental protection and the more stringent law enforcement in recent years, the company’s previous review standards are generally unable to help to prevent and reduce the risk for supply-chain breaking due to the environmental protection problems. Hence, companies are recommended a “three-step” supplier management measure to reduce risks, that is, a comprehensive investigation, a focused “physical examination”, and a periodic follow-up.

A crucial piece of technology in driverless cars is high-definition maps or HD maps. The digital maps used in navigation devices and mobile phones today are relatively simple as they are primarily created for humans who are able to understand and follow simple instructions as they navigate. However, autonomous vehicles, machines and robots require a much different type of map purposely built for robotic systems before they can take control of the steering wheel. However, creating HD maps is not only a technological challenge. A far greater challenge (especially for international companies wishing to access China’s auto market) will be government regulation. This article focuses on the legal challenges facing market players including international companies in developing HD maps for autonomous vehicles in China as well as current market practices and our predictions for trends in China’s regulatory policy going forward.

On 26 December 2017, the National Development and Reform Commission (“NDRC”) issued the Administrative Measures for Enterprise Outbound Investment (“Regulation No. 11”) which will come into force on 1 March 2018. Regulation No. 11 contains six chapters and 66 articles. Compared to the 2014 Administrative Measures for the Verification and Record-filing on Outbound Investment Projects (“Regulation No. 9”), there are several significant changes. The change of the regulation’s title indicates that monitoring of outbound investments will no longer be limited to pre-transaction “verification” and “record-filing”, but will also cover the periods during and after transactions. This article will focus on some key points and the summary of pre-transaction administrative measures required under Regulation No. 11.

Since the melamine milk scandal in 2008, there has been constant reform to the supervision of the infant formula industry. Registration of infant formula milk powder (“Infant Formula”) is probably one of the most significant changes. It will greatly affect all the industry players. From 1 January 2018, the Infant Formula registration requirements in the new Food Safety Law came fully into force. Infant Formula products, either domestically manufactured or imported through general trade, must obtain formula registration before they can be sold in the PRC. This requirement will impact thousands of Infant Formula brands in the market--a great portion of which will not survive this change. It should be noted that Infant Formulas distributed through cross-border e-commerce retail(“CBEC Retail”) enjoy a grace period until the end of 2018 when another new policy will probably come into force.

On 10 June 2015, ROYER BRANDS INTERNATIONAL S.A.R.L. (“Royer”) filed an application with the PRC Trademark Office (“CTMO”) to register trademark No. 17165854 for designated goods in Class 14. This class includes unprocessed and semi-processed precious metals, jewelry boxes, sleeve buttons, cufflinks, jewelry, watches and so on. The CTMO refused the application on the grounds that “Dutch” means “of the Netherlands”. Under Chinese law, names of foreign countries are not permitted to be used as trademarks. Royer appealed the CTMO’s decision to the Trademark Review and Adjudication Board (“TRAB”). TRAB dismissed the application on the grounds that “the word part of the trademark ‘VonDutch and Design’ implies ‘from the Netherlands’, and may mislead the public as to the place of origin of such goods when designated for use on goods including jewelry. Therefore the trademark application is prohibited under Article 10.1.7 of the PRC Trademark Law”. Royer then initiated administrative litigation. After hearing the case, the Beijing Intellectual Property Court found in favor of Royer and overturned the decision of TRAB. TRAB appealed to the Beijing High People’s Court which upheld the first instance judgment.

Recently, Deere & Company won the final trial of a lawsuit involving trademark infringement and unfair competition. The defendants were John Deere (Beijing) Agricultural Machinery Co., Ltd and other two. The Beijing High People’s Court, the court of second instance, held that if there is a conflict between a registered well-known trademark and an ordinary registered trademark on identical or similar goods, Article 13 (3) of the PRC Trademark Law applies. This is the first civil case with a final judgment where the above application rules of Article 13(3) was confirmed and well-known trademarks were protected accordingly.

2017 saw the official implementation of the Cybersecurity Law of the People’s Republic of China (“Cybersecurity Law”), building on past efforts and bringing new implications for the future. The implementation of the Cybersecurity Law brought clarity to cybersecurity regulations in various industries. Meanwhile, under the new regulatory system, coordination between the National Cyberspace Administration and competent industry authorities has led to the implementation of the Cybersecurity Law that marks a new stage of development for China’s cybersecurity supervision. In fact, the official implementation of the Cybersecurity Law on June 1, 2017, accelerates the pace of introducing relevant departmental rules, judicial interpretations, and national standards, many of which are still receiving public opinion. Further, law enforcement in cybersecurity is under way in various industries, and departments for cyberspace affairs, telecommunication, and public security have strengthened their law enforcement efforts within their respective administration. The roll-out of the Cybersecurity Law and relevant supportive measures have triggered wide reaction, receiving extensive attention from domestic and international enterprises, organizations and media.

After the promulgation of the State Council’s Decision on Amending the Regulations of the People’s Republic of China (“PRC”) on the Administration of Foreign Funded Banks (Consultation Paper) (the “Administrative Regulations Consultation Paper”) in late October 2018, the China Banking and Insurance Regulatory Commission released the Decision on Amending the Implementation Rules of the Regulations of the PRC on the Administration of Foreign Funded Banks (Consultation Paper) (the “Implementation Rules Consultation Paper”, together with the Administrative Regulations Consultation Paper, the “Consultation Papers”) on 28 November 2018 to solicit public opinions. The main purposes of amending these two legislations, which are of ultimate importance to the supervision of foreign funded banks are to put into practice the country’s opening-up policies in the banking sector, to make law to implement the opening-up measures in the banking sector, which have been repeatedly referred to by senior government officials in various summits and public speeches, and to further liberalize the foreign investment in China’s banking sector. This article will focus on the amendments made by the Consultation Papers.

On 6 February 2018, the Hong Kong Monetary Authority (“HKMA”) published a revised Guideline on Authorization of Virtual Banks (“Guideline”). The Guideline sets out principles that the HKMA will consider when deciding whether to authorise virtual banks to conduct banking business in Hong Kong. The announcement ties into the HKMA’s stated goal of bringing Hong Kong into a new era of smart banking, as part of a package of initiatives. This is evident from the “welcome” to virtual banks in the Guideline. The public consultation will last until 15 March 2018 and the HKMA will take into account the comments received during this consultation in order to issue a revised guideline in May 2018. Meanwhile, the HKMA is receiving applications for the authorisation of virtual banks.

China will be too big for international autonomous car suppliers and service providers to ignore. Biggest automotive market, continued strong growth, right infrastructure, ability for government to implement, early adopter consumers, popularity of car sharing and sharing economy, new and innovative companies on the rise all point to China being pivotal to the development of autonomous cars. For international companies, China will be a major opportunity but also a major challenge. In addition to business competition international companies will also have to contend with regulatory controls in China and in particular restrictions on foreign investments in specific sectors. International companies already with a presence in China are deepening their footprint in China to ready themselves for the new opportunities that autonomous vehicles will provide. For many this will involve setting up their first Joint Ventures (even if they have had wholly foreign owned enterprises for decades in China) or by cooperating with domestic companies that have expertise or licenses in restricted sectors. There will be opportunities for wholly foreign owned enterprises but these are unlikely to be the most important or lucrative businesses. Accordingly for many investors success will necessitate working with Chinese partners–whether they be fellow shareholders or cooperative partners.

If couriers have any traffic accident when delivering services, the compensation liability may sometimes be borne by the takeout platform, or sometimes by couriers themselves, or even by an unknown third party. In principle, there should be rules to govern the apportion of the compensation liability, for according to the basic principles of Tort Law, when a worker in “working relationship”causes damage to others during delivery of work, the party assigning the work shall bear the tort liability. However, now the relationship between couriers and takeout platforms is so complex that the question who should bear the liability also becomes complex. Regardless of the type of couriers, which party shall bear the liability for damage caused in their work should be based on the legal relationship between couriers and the parties. If working relationship exists, then the liability should be taken by the takeout platform or the franchisee; if it does not exist, the liability is usually borne by couriers themselves. If there is no working relationship between the takeout platform and the courier, the platform still need to maintain clarity and prepare evidence to confront a victim’s claim of liability for damage; otherwise blame for others may be shifted to it.

The use of a parent company guarantee (PCG) can be a valuable tool for securing the performance obligations of a counterparty to a contract. A PCG is often used in the construction industry where parent companies give guarantees to bolster the financial credibility of their subsidiary contractor companies. PCGs are often used in commercial contracts for the sale of goods to insure payment obligations. PCGs are frequently offered as security by Chinese companies in transactions offshore. PCGs will continue to be used as a form of security as Chinese companies go abroad. China’s Belt and Road Initiative (BRI) has already begun to see huge amounts of offshore investment and cooperation. With each BRI project comes the uncertainty of financial exposure and a risk of cross-border disputes. The PCG is often proffered as the way to minimize risk. You need to understand what you bargain for in entering a PCG and insure that the PCG’s terms address the nuances of the law and practice in relation to on-demand PCGs in China. Creditors need to understand the law and practice surrounding on-demand parent company guarantees in China. The purpose of an on-demand PCG is quick satisfaction of a debt owed. For now, in China, this expectation might be difficult to realize without a well-considered strategy.

With the proliferation of personal data protection legislation in different jurisdictions, the conflict between enterprises’ commercial behaviors and personal data protection are widely concerned by the law enforcement authorities around the world. Facebook, for example, with a recent spate of being punished for excessively collecting user’s personal data by using cookies and leaking data concerned over 50 million users, the superstar of open social platforms has suffered a severe losses on its stock market and reputation. Internet companies such as Facebook have quickly grown into “Internet access” enterprises in the eyes of the users by taking advantages of the open platform. These new types of enterprises are featured in the possibility to provide various value-added services by virtue of its multilateral platform market, through which such enterprises get a large number of different types of user data and then achieve and realize new business models by using big data technologies. As a result, such enterprises become “data driven” companies. It is foreseeable that to achieve their commercial ambitions, such enterprises face inevitable conflicts between their business practices and the protection of personal data. Therefore, how to achieve a balance between such enterprises’ business development and the protection of personal data is becoming a common concern of enterprises, legislation and enforcement authorities in the long run. As regards cookies and Open APIs, this article sets forth important compliance issues for enterprise’ reference.

On December 21, 2017, the Ministry of Finance, the State Administration of Taxation (SAT), the National Development and Reform Commission and the Ministry of Commerce jointly issued tax circular Cai Shui [2017] No. 88, Circular on Policy Issues Concerning Provisionally Not Levying Withholding Income Tax on Direct Investments by Foreign Investors Made Using Distributed Profits, which provides a temporary waiver of enterprise income tax for non-tax-resident enterprises that make direct investments in an encouraged industry with profits distributed by a tax-resident enterprise in the PRC (Tax Deferral), if certain conditions are met. Subsequently, on January 2, 2018, the SAT issued the SAT Announcement [2018] No.3, Announcement on Issues Relevant to the Implementation of the Policy of Provisionally Not Levying Withholding Income Tax on Direct Investments Made by Foreign Investors Using Distributed Profits in order to provide further guidance in this regard.Both Circular 88 and Announcement 3 have a retrospective effect from January 1, 2017, which means that the Tax Deferral applies to dividends or profit distributions derived by overseas investors from their equity investments in the PRC on and after January 1, 2017. The issuance of the rules in relation to the Tax Deferral is definitely a positive signal for overseas investors with investment in China, especially for the ones which have intention to expand their Chinese investment. Also, it shows the Chinese government’s resolution to attract more foreign capital flows and it is reasonably anticipated that more foreign capital will be retained in China for further investment.

2017 has witnessed a quickened pace of legislative development on personal information protection worldwide. A variety of countries in the Asia-Pacific region introduced or amended their legislation on personal information protection. Such as in China the Cybersecurity Law of the People’s Republic of China was implemented on June 1, 2017, the Mandatory Data Breach Notification was approved in February, 2017 in Australia, and the revised Personal Information Protection Act took effective on May 30, 2017 in Japan. The General Data Protection Rules (the “GDPR”) issued by the European Commission will come into force on May 25, 2018. In view of the trend of global economic integration, the extended jurisdiction of the GDPR will influence the global practice of personal information protection to a great extent. Against such background, the Information Technology--Personal Information Security Specification (GB/T 35273-2017) (hereinafter the “Specification”), formulated by the Standardization Administration of China based on domestic laws and regulations, international rules, and practices, was released on January 24, 2018 and will be effective as of 1 May 2018. This article will focus on the application of the Specification from a practical perspective based on legislative practice in other countries.

According to the report of Legal Daily on October 24th, the Legislative Affairs Commission of the Standing Committee of the National People’s Congress respectively sent letters to five local people’s congresses in Guangdong, Yunnan, Jiangxi, Hainan and Fujian. It is suggested that these congresses amend provisions of local regulations on population and family planning based on the reality of each province, regarding the dismissal or termination of employment contracts with employees who have more children than that are allowed by the Law on Population and Family Planning (the “Family Planning Law”) (“unplanned childbirth”). The essence of “Dismissal Based on Unplanned Childbirth”dilemma is not that local regulations exceed the limits of the Population and Family Planning Law or the Employment Contract law; instead, it lies in the existing conflict between the labor rights conferred by the Employment Contract Law and the birth rights of the employees empowered in the Family Planning Law. Therefore, to address the “Dismissal Based on Unplanned Childbirth” issue can not only rely on the amendment of local regulations on population and family planning. It is our opinion that the radical solution is to amend the Family Planning Law in the first place in order to meet the trend of the new area, and further to revise local regulations and company’s internal rules.

The move towards autonomous cars will herald a sea change that will reach far beyond the automotive sector alone. In the ecosystem of autonomous vehicles blockchain may not be a disruptive technology but rather an enabling technology. Cybersecurity is one of the major challenges that autonomous vehicles face. Indeed cyber-security may be the Achilles heel of autonomous cars – if this chink in the armor cannot be addressed then it may well be “bye bye global roll out of driverless cars”. However, due to its very essence blockchain may play a critical role in solving or mitigating cybersecurity risk (i.e. an “Achilles Boot”). In addition to solving this critical issue blockchain will intersect with autonomous vehicles in areas such as data sharing, payments, insurance, ride sharing etc.

On February 13, 2018, the China Banking Regulatory Commission (the “CBRC”) promulgated the Decision on Amending the CBRC’s Implementation Measures for the Administrative Licensing Matters of Foreign-Invested Banks (CBRC Order 2018 No. 3, the “Order No.3”). Following a series of regulations and policies relating to opening-up of the banking industry issued in 2017 , the Order No.3 is considered to be a further step of great significance for the purpose of implementing the general principles of further expanding opening-up, improving the levels of opening-up of the banking industry and streamlining administration and delegating more powers to lower-level authorities continuously. The foreign-invested banks have been used to conducting business operation on a legal and compliance basis with a robust and prudent risk appetite since their entry into the PRC market, which has been promoting the compliance-based development of the financial market. However, they are also facing the competition against the domestic-funded banks with an aggressive risk appetite, and as a result, the foreign-invested banks remain a relatively slow growth and small market share. The expansion of opening-up and relaxation of the market access are expected to provide further opportunities for the foreign-invested banks to develop their PRC businesses, build and strengthen a compliance culture in the banking industry and push the further compliance-based development of the financial market.

On 27 February 2018, Shanghai Municipal Economic Information Commission, Shanghai Municipal Public Security Bureau and Shanghai Municipal Transportation Commission jointly issued the Shanghai Regulations on Intelligent and Connected Vehicles Road Testing (Trial) (“Shanghai Regulations”). Hot on the heels of Beijing, Shanghai has become the second city in China to issue road testing regulations for self-driving cars. This is another important momentum for the development of autonomous cars in China following Beijing’s road testing regulations (“Beijing Regulations”) issued late last year. The Shanghai Regulations use the term “intelligent and connected vehicle” (ICV) for self-driving cars. The self-driving cars governed by the Shanghai Regulations cover L3, L4 and L5 vehicles. Although the Shanghai Regulations are largely similar to the Beijing Regulations there are some notable differences. This article will analyze the key points and requirements of the Shanghai Regulations.

This Article, which will be published in two parts, will discuss practical tips in 10 key areas for the better and effective management of outbound M&A transactions by PRC investors. The first part will discuss the choosing of lawyers, reviewing legal fees, forming the transaction structure, setting a timetable and managing due diligence. The second part will analyze the relative legal issues in terms of approval regulation, transaction documents, effect of closing and dispute management.

In China’s push to create an open yet orderly economy, the National Development and Reform Commission has issued new rules on Chinese outbound investments, effective from 1 March 2018. In an attempt to refine the rules following the Chinese government’s tightening of capital controls last year which affected the majority of Chinese outbound investments, the new Administrative Measures for Enterprise Outbound Investment (Regulation No.11) provide for clearer and more streamlined regulation of Chinese outbound investments, but also place more scrutiny on investments that may be contrary to China’s economic policies.

Big data is a focus area for many industries and the auto industry is no exception. However, with the advent of self-driving cars the auto industry will not only be a consumer of data but also a major generator of data. A single self-driving car could generate as much as 100GB of data every second. Data--great for companies, great for convenience, great for consumer experiences-- but not so great for privacy. Privacy concerns on the part of consumer have greatly increased in recent years with the growth of social media, internet and data hacks. Self-driving cars will amplify concerns and consumers and regulators realize how much data and personal information these vehicles will generate, use and record about users and the surrounding environment. Self-driving cars will be a veritable fleet of data factories. Such mobile surveillance will mean that privacy will be compromised everywhere. This article will consider why massive amounts of data will be generated by self-driving cars; legal challenges that privacy poses for self-driving cars; current practice in leading jurisdictions; and legal implications on privacy under Chinese legal regime.

Nowadays payment service is increasingly interweaving into commerce and the Internet in China. Its role as the last-mile infrastructure provider connecting the two arenas for many business models is increasingly being appreciated by the market. Not long ago, China’s payment sector was, by and large, not accessible to foreign players, although many foreign players wish to enter into the rapidly growing Chinese payment market and many domestic payment service providers wish to have certain foreign participation as a way to gain access to the offshore capital market. This situation may soon be changed with the promulgation of The Announcement Regarding Certain Issues on Foreign Investment in Payment Institutions (the “The Announcement”) by the People’s Bank of China in March 2018. This article will discuss the regulatory barriers for foreign accession to the Chinese payment market prior to the Announcement, key provisions of The Announcement, and the implications for foreign investment in payment industry in China.

Guangdong High People’s Court recently issued a “Working Guideline of Guangdong High People’s Court on the Trial of Standard Essential Patent Dispute Cases (for trial implementation)” (hereinafter referred to as “the Guideline”) on 26 April 2018, which is the most comprehensive guideline for trial of SEP-related disputes in China till now. Theoretically speaking, this Guideline has a binding effect on three major IP courts/tribunals in view of jurisdictional mechanism of SEP-related cases in Guangdong province, including Guangzhou IP Court, Shenzhen IP Tribunal (of Shenzhen Intermediate People’s Court) and Guangdong High People’s Court which is the appellate court of the former two. However, this Guideline actually reflects some widely recognized court practices on SEP-related issues, and will probably be referred to by other courts in China. Interestingly, this Guideline has incorporated rules established in a number of SEP-related cases worldwide, including Huawei v. ZTE (CJEU), Unwired Planet v. Huawei (UK), Motorola v. Microsoft (US), TCL v. Ericsson (US), Iwncomm v. Sony (CN) and Huawei v. Samsung (CN). This article presents some bullet points of this Guideline as well as a few comments from the author.

On 11 April 2018, the Ministry of Industry and Information Technology, the Ministry of Public Security and Ministry of Transport jointly issued the Administrative Rules on Intelligent and Connected Vehicle Road Testing (Trial) (the “National Rules”). The National Rules have been issued subsequent to local regulations on self-driving car road testing being issued in Beijing, Shanghai and Chongqing in recent months (“Local Regulations”), and will take effect 1 May 2018. The National Rules are based on both best practices in other jurisdictions as well as some of the initiatives pioneered in the Local Regulations. The National Rules stress safety which is no doubt a response the Uber accident fatality in Arizona. The issuing of the National Rules adds further momentum to China’s regulations in respect of road testing for autonomous vehicles and paves the way for increased road testing of self-driving cars across China. It seems that little will slow down the development and commercialization of autonomous vehicles in China.

This year, the CPC Central Committee, the State Council and the People’s Bank of China (PBC) have continued their efforts to open up the banking sector. It was stressed at the National Financial Work Conference that further opening up of the financial industry is a significant part of China’s overall opening-up policy. The Notice of the State Council on Several Measures for Promoting Foreign Investment Growth rolled out 22 measures to reduce access restrictions on foreign capital and four other areas. n addition, at the Thirty-Sixth Meeting of the International Monetary and Financial Committee, PBC Governor Zhou Xiaochuan expressed China’s commitment to further open up the financial industry. It was also stated at the Central Economic Work Conference that China will further open the financial sector, significantly ease market access, implement pre-establishment of national treatment plus a negative list across the board, continue to shorten the negative list, and speed up the improvement of laws governing foreign investment. China will continue its efforts long-term in attracting foreign investment into its banking industry by promoting the improvement of services. With the opening of China’s financial industry, cross-border cooperation and innovation will continue to increase.

Initial Coin Offering or Initial Crypto-Token Offering (“ICO”) refers to the issuance of crypto-currencies. The concept stems from Initial Public Offering on the stock market. In an ICO, general investors exchange Ether, Bitcoin, or other virtual currencies for a new token offered by the issuer. A small number of ICO projects allow investors to pay in conventional currencies. There is a new trend appearing in the regulation of virtual currencies. Countries such as the United States, Japan, and South Korea are strengthening their regulation of ICOs. ICO issuers are usually entities registered outside of China. This can create jurisdictional issues. When relevant departments in China do have jurisdiction over an ICO issuer, a number of legal risks may arise. This article will focus on current supervision of ICO and related legal risks.

On 10 April 2018, President Xi Jinping made a keynote speech at the opening ceremony of the Boao Forum for Asia Annual Conference 2018. He announced that China will significantly ease market access, including in the financial sector. The next day, the People’s Bank of China Governor Yi Gang presented multiple measures for further opening up the financial sector and the timeline for doing so. This marks a new chapter in China’s opening-up of its financial market. It will bring new business opportunities for foreigners investing in financial institutions in China. Foreign-funded financial institutions will be treated equally with Chinese financial institutions in terms such as business scope and applications for certain licenses. We believe that foreign investors will enjoy more investment opportunities in domestic financial institutions. Yi Gang has stated that relevant government departments are currently making amendments to existing laws and regulations. The article summarizes the opening-up measures for foreign investors and business scope in each relevant financial sector and their timeline.

On 1 April 2018, the Announcement of the State Administration of Taxation on Issues Relating to “Beneficial Owner” in Tax Treaties, (“Announcement 9”) came into force. It applies to both foreign and resident enterprises and individuals of Hong Kong and Macau who obtain dividends, interest or royalties from China. They can apply for a beneficial owner (“BO”) status, which will allow them to enjoy tax treaty and arrangement benefits. BO is an important issue in relation to dividends, interest and royalties under tax treaties and arrangements. It aims to prevent treaty abuse. The China State Administration of Taxation (SAT) has released the certain regulations around BO. This article introduces the new “beneficial owner” rules that will be of major benefit to foreign investors.

On 11 April, 2018, People’s Bank of China (“PBC”) Governor Yi Gang announced specific measures to further open up the domestic financial market at the Boao Forum for Asia (“BFA”). China will allow qualified foreign investors to engage in the business of insurance agency and the business of insurance appraisal in a few months. In the meantime, foreign-owned insurance brokerage companies are to be allowed to expand their business scope to equal their Chinese peers. These indicate that all three fields, namely insurance brokerage, insurance agency, and insurance appraisal, will open up to foreign investment. The extent and pace of liberalization will be beyond expectation. On 27 April, 2018, the China Banking and Insurance Regulatory Commission (“CBIRC”) issued Measures to Accelerate the Opening-up of the Banking and Insurance Industries, saying the CBIRC will speed up the implementation of the measures to allow qualified foreign investors to run insurance agencies or offer insurance appraisal services in China, and issued the Notice on Expanding the Business Scope for Foreign-funded Insurance Brokerages to allow foreign-funded insurance brokerages to cover the same business scope as their Chinese peers. Looser restrictions on foreign shareholding means foreign investments in the insurance appraisal sector can pursue more flexible organizational forms, i.e. they can seek a controlling position in a joint venture or even establish a wholly foreign owned subsidiary. Further opening-up would strengthen competition and promote reform in the market. It would also improve market efficiency and help protect consumer benefits.

On 11 April 2018, the Governor of the People’s Bank of China, Yi Gang, announced at the Boao Forum for Asia (“BFA”) that the 50% foreign ownership restriction in the life insurance sector is to be lifted to 51% in the first half of 2018. In addition, it was noted that complete liberalization of the life insurance sector (i.e. no foreign ownership restriction) can be expected in three years’ time. On 27 April 2018, the China Banking and Insurance Regulatory Commission (“CBIRC”) issued an announcement on accelerating the implementation of measures regarding opening up the markets of banking and insurance. The CBIRC stated in the announcement that the liberalization of the foreign ownership in the life insurance sector as announced at the BFA would be implemented as soon as possible. Given the scarcity of insurance licenses and the unique attributes of the insurance business, mergers and acquisitions (“M&A”) of insurance companies have always been chased after by the capital. For the specific M&A rules of insurance companies, in addition to the regulatory requirements for equity-related activities, the CBIRC issued the Measures for the Administration of the Equities of Insurance Companies (Order No. 5 [2018] of the CIRC) on 7 March 2018, which provides further guidance and stipulates additional requirements for M&A transactions for insurance companies. Based on our experience in insurance companies’ M&A transactions and in reference to the Equity Measures, this article outlined the M&A transaction options and common issues for M&A transactions involving insurance companies.

It is reported in the People’s Court Daily, issued by the Supreme People’s Court (hereinafter referred to as “Supreme People’s Court“) on 25 April 2018, that the the 3rd Circuit Court of the Supreme People’s Court recently held an open hearing of the case of Fujian Weijie Investment Co., Ltd. vs. Fuzhou Tiance Industry Co., Ltd. with Junkang Life Insurance Co., Ltd. as the trial third party and made a ruling. As the Supreme People’s Court decided that the shareholding entrustment arrangement with respect to insurance companies was invalid, the case caused great concern in the financial industry. In addition, the case will be an alarm for entrusting any third party to hold equities in insurance companies. There is a possibility that any Shareholding Entrustment Agreement entered into by dormant shareholders and nominal shareholders might be ruled invalid by the court. For a dormant shareholder, it is advised to reach a prior arrangement with the nominal shareholder before a dispute arises and consider entering equity transfer or seeking other approaches to remove the shareholding entrustment arrangement so as to meet relevant regulatory requirements and avoid such risks.

On April 19, 2018, the Supreme People’s Court of the P.R.C released top 10 IP typical cases as well as additional 50 typical IP cases of the year 2017. This article has summarized 19 out of the 22 trademark cases among them which involves the recognition of generic name, the protection of unregistered trademark, fair use of a trademark etc., from the perspectives of civil cases and administrative cases.

With the continuous development of “Internet Plus”, new industries such as online taxi-booking and webcast services that use network platforms to operate have been emerging. Employees working in new industries are different from employees in traditional standardized employment relations in terms of job duties, occupational characteristics, etc., and differences are also seen in enterprises’ labor management. Then, in practice, how does the court identify existence of employment relationship in new industries such as online taxi-booking services, and what factors will be considered primarily when determining? It is impractical to impose traditional determination standards of employment relationship on taxi-booking platforms and other online-booking platforms, or to define the relationship between platforms and drivers in uniformity. In practice, various factors such as online booking platforms’ management style, remuneration pattern, and requirements on working hours for the service providers determine the legal relationship between the two parties and the legal responsibilities and obligations of online-booking platforms. This article believe that when formulating relevant policies, relevant authorities should not follow the traditional system mechanically, to avoid restricting the development of new economic model.

China is embarking on bold moves to re-shaping its auto industry policy. This follows recent announcements in relaxation of key restrictions on foreign investment in the auto sector. The National Development and Reform Commission (NDRC) is the body tasked in China with laying the direction for industrial policy. On May 17, 2018 the NDRC circulated the draft Administrative Rules on Auto Industry Investment (“Draft Rules”) to local governments and industry stakeholders for comment. The Draft Rules when passed will replace the current car industry development policy that has been in place since 2004. In short the Draft Rules reform the China approval system for auto investment projects by delegating more authority to local governments, expressly prohibit any new production capacity for fossil-fuelled vehicles and raise the threshold for establishing electric vehicle manufacturing companies. The Draft Rules set 25 May 2018 as the deadline for feedback from local governments and industry participants. Accordingly a tight timeline and sorry if you missed it! This does, however, hint that feedback will be limited and that NDRC has clear ideas as to the direction it intends to take. Generally, longer feedback periods are granted. This article will introduce the key points of the Draft Rules.

Given recent innovations in Chinese residents’ consumption concepts and the support of national policies, auto finance and consumer finance have both achieved relatively rapid growth. On 11 April, PBOC Governor Yi Gang (易纲) announced at the Boao Forum for Asia various financial liberalization measures to be launched this year, including encouraging the introduction of foreign investment in financial sectors such as auto finance and consumer finance. This move may bring new opportunities for development for the auto finance and consumer finance industries. This article will review the development history of auto/ consumer finance companies and the status quo of foreign investment access and, based on our experience, analyze the opportunities the current opening-up of the financial market may bring to foreign investors as well as the regulatory requirements foreign investors should pay special attention to when investing in these two types of companies.

Allocation of burden of proof is an area of great concern in a process patent infringement dispute. In practice, the accused infringing process is usually strictly controlled by the accused infringer and hard to approach, which poses great challenges for a patentee of a process patent to produce evidence and enforce its legitimate right. Fortunately, a patentee of a process patent for manufacturing a new product doesn’t have to bother with producing evidence showing the defendant’s infringement, as the Patent Law and the Rules of Evidences in Civil Procedures both set forth that the accused infringer shall furnish proof to show that the process used in the manufacturing of its products is different from the patented process as long as the patentee can prove that the process patent directs to a new product and that the accused infringer have made identical products. However, a patentee holding a process patent for manufacturing a known (not new) product will not be so lucky. In his case, the patentee has to struggle with collecting evidence with respect to the defendant’s process, as no law or interpretation has specified the allocation of burden of proof in such circumstances so the general principle that “He who alleges shall bear the burden of proof” will be followed.TRIPS agreement provides a bypass for the patentee under the above situation by stipulating a presumption to be invoked and a reverse of burden of proof in certain circumstances. This article will provide a brief introduction to the invocation of the presumptions in patent infringement disputes over manufacturing process of a known product explored in the judicial trial in China.

On 27 February 2018, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the Opinions on Several Issues Concerning Heightening Reform and Innovation in Intellectual Property Right Trial Field. The second part of Article 2 specifically stresses two points: “First, adhering to the value orientation that intellectual property rights create value, and right holders deserve interests in return. A judicial determination mechanism for damages, with compensation as the principal means and punishment as the supporting means, shall be established, and the problem of “low-value compensation” in action against infringements on intellectual property rights shall be resolved first. Second, tightening punishment for infringements on intellectual property rights and reducing enforcement costs. For repetitive infringements, infringements in bad faith, or other serious infringements, more compensation shall be awarded according to the law, and the amount of compensation shall be raised.” Chinese judicial policy documents have kept raising the amount of compensation over the past few years. The article selected 15 Chinese cases with the highest compensation and figured out the way courts awarded damages and the principles for determining damages. This article expects to, accordingly, provide some guidelines for legislation strategies and evidence collection in future intellectual property infringement cases.

The year of 2018 is a remarkable year in Hainan’s pharmaceutical and healthcare industry. The top-level strategy disclosed in one of President Xi’s remark and other regulations shed light on China’s central authority’s determination to accelerate the development of Hainan’s pharmaceutical and healthcare industry, and on the industry’s enormous potential. The rapid development of Hainan’s medical care started with the establishment of the Boao Lecheng International Medical Tourism Pilot Zone, which was approved by the State Council in 2013. There are some specific preferential policies is the Pilot Zone, and the benefits of the special polices are evident and growing. The preferential policies cover the Pilot Zone and the entire Hainan Province, and the development prospects of Hainan’s pharmaceutical and healthcare industry. Outside the Pilot Zone, Hainan also promulgated a series of other measures to attract foreign investment and overseas patients. These measures will boost Hainan’s pharmaceutical and healthcare industry as well.

2017 was a big year for the rule of law in China. We saw many legal initiatives aimed at expanding and improving options for cross border dispute resolution. The last twelve months have seen many notable developments in the cross-border disputes sphere in China. These developments have cut across State policy, judicial decisions and arbitral institutions. They demonstrate China’s interest in assuming a role in the resolution of disputes involving Chinese parties and in providing an increasingly transparent and predictable domestic forum for resolution of these disputes. They provide new options for parties considering doing business with China and for Chinese businesses going outbound. This article presented some of the developments from China last year that affected or will affect the role of courts in hearing cross-border disputes in terms of Principle of reciprocity; The Hague Convention; International commercial courts. Some of the key recent developments in arbitration in China were described as well.

The Belt and Road Initiative (BRI) is an important and ongoing worldwide initiative in People’s Republic of China (PRC) , that the PRC has organised an annual Summit (Summit) in the Hong Kong Special Administrative Region to report on progress and where to next. This article put forward three major themes were consistently raised at the Summit as essential to successful transition from Vision to Action. The most successful cross-border investments are those which are implemented in conjunction with a considered and tailored risk management plan. The growing involvement of private enterprise is also consistent with our experience as set out above under ‘Vision to Action’. Harmonisation of regulations and policy coordination between participating nations is essential to the success of the BRI, where projects often transcend political and jurisdictional boundaries.

Investors journeying along Belt and Road Initiative (BRI) countries will be wary of the operational, political and legal risks that come along on the route. To mitigate these risks, aside from the usual prudent contracting and investment structuring, investors should also be aware of their rights under the web of investment treaties which cover the route. However, knowing about the existence of investment treaties is only the first step. Investors should familiarise themselves with the particular dimensions of substantive rights as expressed in the various Chinese Bilateral Investment Treaties (BITs) and Multilateral Investment Treaties. While these treaties and the Washington Convention provide a robust source of potential investor protections, they must be understood and carefully planned for by BRI investors. There remain key differences between BITs with BRI countries. In this article, we detail some of these differences and some of the key considerations for making BRI investments.

In recent years, China has experienced unprecedented economic, military and diplomatic growth. China is now regarded as the number one economic superpower by the International Monetary Fund (IMF) on the basis of gross domestic product (GDP), surpassing the United States. Beginning with its accession to the World Trade Organisation, there have been a number of recent initiatives that have contributed to China’s prolific involvement in global trade and investment. China’s entry into international investment treaties has the dual benefit of signalling to the world that China is a safe place to invest, as well as providing Chinese outbound investors with the legal framework to protect their foreign investments. The rise in Chinese foreign trade and investment and China’s open attitude towards international investment agreements has had a direct impact on the number of Chinese parties involved in cross-border commercial disputes. Specifically, Chinese parties are becoming increasingly assertive in enforcing their rights internationally. This article explores the current and anticipated increase of Chinese investors as claimants in cross-border disputes and the cultural, legal, procedural and practical implications this has on international commercial and investor-state arbitrations.

While there is no universal approach to costs awards in international arbitration, “costs follow the event” is the starting point for most tribunals. Costs incurred in an arbitration can usually be divided into the following two categories, namely costs of the arbitration and party costs.In any arbitration, the parties have a discretion to agree on how to allocate the costs during the arbitral process. Agreement may be recorded in the arbitration agreement or the operative provisions of the contract between the parties.Tribunals will generally apply the parties’ agreements on costs allocation, unless the national law provides otherwise.In 2015, the International Chamber of Commerce (ICC) Commission published its Report on “Decisions on Costs in International Arbitration” (ICC Report).Previously, it was considered general practice in investment treaty arbitration to disfavour the shifting of arbitration costs against the losing party. An emerging trend is to couple this approach with “adjusted” costs orders which reflect the relative success of the parties in the arbitration and the parties’ conduct in the arbitration. This trend makes costs allocation a potentially powerful tool in ensuring the efficiency of proceedings.

In June 2018, the National Development and Reform Commission (“NDRC”) released the Answers to Frequently Asked Questions Concerning Outbound Investment by Enterprises (“Answers to FAQs”) on its official website, providing clarification to 61 frequently asked questions regarding the application of the new Administrative Measures for Enterprise Outbound Investment (“Regulation No. 11”). It’s particularly worth noting that, the NDRC made restrictive interpretations with respect to the scope of sensitive projects.According to the Answers to FAQs, outbound investments in sensitive industries like “real estate”, “hotel” and “setting up offshore equity investment funds or investment platforms without specific underlying industrial projects” will not be categorized as sensitive projects and therefore is not subject to the NDRC’s verification procedures for outbound investment, provided that “they do not involve commitment of domestic assets or interests or provision of onshore financing or guarantee and the entire capital is raised from overseas.” However, if such investment involves commitment of domestic assets or interests or provision of onshore financing or guarantee, they would still fall into the category of sensitive projects which are subject to the NDRC’s verification procedures.

As the Chinese economy enters the “new normal”, the Chinese government has been adjusting its industrial and credit-related policies and strengthening regulation of Chinese financial institutions. A large number of non-performing loans (NPLs) as well as actual loan defaults have started to surface. The risks associated with rising levels of NPLs require Chinese banks to enhance their ex ante and ex post credit risk management practices. They also need to strategically and effectively navigate complex domestic and cross-border loan recovery, debt restructuring and insolvency processes.Careful planning and effective decision-making is required for banks to manage their NPLs and strategically engage in debt restructuring and insolvency processes. While insufficient cash flow is the main cause of a borrower’s inability to repay its debts, certain other events may also adversely affect the borrower’s overall business and financial condition.

In cross border transactions, there is sometimes a misconception amongst both PRC and foreign parties that all contracts are by and large the same, whether governed by PRC law or foreign law, and that the key to a good contract is just proper drafting. Whilst it is true that the key to a good contract is good drafting backed by proper experience and expertise, different legal systems have inherent conceptual differences and as such, there are fundamental differences between PRC law-governed contracts and foreign law-governed contracts. These differences affect the interpretation, construction and adjudication of a contract – and will impact parties’ rights, obligations, remedies and liabilities under it. This article briefly compares some key general differences between PRC law-governed contracts and common law-governed contracts.

On August 1, 2018, the Bureau of Industry and Security issued a rule amending the Export Administration Regulations (“EAR”) by adding forty-four Chinese entities to the Entity List. Placement on the Entity List signifies that the End-User Review Committee (“ERC”) has determined that the listed entities have been, or pose a significant risk of, acting contrary to U.S. national security and foreign policy interests.Only listed companies may appeal a decision by submitting a written request to the ERC to modify or remove their entries. Even if a listed entity fails to obtain a positive outcome with respect to a request for removal, the Entity List is constantly changing, as the ERC reviews the Entity List on an annual basis to determine whether any listed entities should be removed or modified.Should a listed entity choose to pursue the matter further, it must turn to the federal judicial system in hopes of overturning the ERC’s determination.

Against the backdrop of the Belt & Road Initiative and more Chinese state-owned enterprises (“SOEs”) going outbound,concerns about whether Chinese investors have a probable path to judicial resolution of recovery from an SOE in case there is any dispute. It can be confusing whether SOEs qualify for state immunity. The legal doctrine of sovereign immunity, or state immunity initially provided that a state is immune to the jurisdiction of foreign courts and the enforcement of court orders, even if the acts involved are commercial in nature, unless it chooses to waive such immunity. This is referred to as the doctrine of “absolute immunity”. Not until the mid-twentieth century when governments became more active in commercial activities, was the doctrine condemned to be unfair to private companies. Since 1970s, the US and some European countries have switched to the doctrine of “qualified immunity” or “restrictive immunity” by codifying exceptions to limit the application scope with respect to, for example, commercial transactions, personal injuries, and patents.This article will consider this issue in light of the practice in the United Nations Convention on Jurisdictional Immunities of States and Their Property, the People’s Republic of China, Hong Kong SAR, the United States, and the United Kingdom.

Article 21 of the Spanish Arbitration Act (AA), governing the civil liability of arbitrators, has been receiving considerable attention since early 2017 as a result of the Supreme Court Judgment 102/2017 of the civil liability suit fled by PUMA SE.The aforementioned Article 21.1 of the AA significantly reformed Article 16.1 of the former AA of 1988, which had provided that arbitrators could be held liable for damages caused by negligence or willful misconduct in the performance of their duties in arbitration proceedings. The introduction of this new provision limited their liability to cases involving “bad faith, recklessness or negligence”. The motivation behind this reform was to avoid the previous exorbitant liability system, based on any type of fault which could in practice result in a situation with a real effect on the impartiality and independence of the arbitrators or even in arbitrators refusing to accept arbitrations for fear of becoming the target of such broad liability. The ultimate aim of this reform was to codify the concept of “freedom to judge”, enshrined in the principle of “immunity” as existing in Anglo-Saxon legislation, and which solely allowed for liability in those cases in which the conduct of the arbitrators was guided by willful misconduct or inexcusable negligence.

The first China International Import Expo (“CIIE”) unveiled in Shanghai on 5 November. The CIIE is the world’s first import expo held at the national level and also an important decision made by China to pursue a new round of high-level opening-up.It demonstrates China’s major initiative to still widen market access to the rest of the world at a historical turning point for the country to transform from “selling globally” to “buying globally”. China will stimulate its potential for increased imports, unleashing more new opportunities for domestic and foreign enterprises. As an international platform for opening-up and cooperation, this annual event will also become the first stop for products imported to China.Temporary Admission is the primary method adopted by the customs authorities for the regulation of import exhibits into China. Bonded exhibition and trading is an innovative customs clearance policy for import exhibits in recent years.In order to support the first CIIE, the Ministry of Finance and the GACC have made breakthroughs on certain part of import policy.

On April 24, 2017, Beijing Higher People’s Court and Beijing Labor and Personnel Dispute Arbitration Commission jointly issued the Answer on the Legal Application of Labor Dispute Cases (hereafter referred to as “the Answer”). Article 11, Section 3 of the Answer adopts a lenient attitude towards the standard of reviewing unlawful dismissals during the probation period. The Answer clearly points out that, when determining whether laborers meet the recruitment conditions, the standard applied during the probation period may be moderately lower than that after the expiration of the probation period. More than one year has passed since the Answer was issued, by reviewing recent judgments made by arbitration commissions and courts on dismissals during the probation period.

Cosmetics is big business in mainland China and growing. The size and growth of the Chinese cosmetics market has not gone unnoticed by the authorities. The PRC authorities are now overhauling the system to better regulate the cosmetics industry. The Regulations on Hygiene Supervision of Cosmetics (“Current Regulation ”)are the most important and also primary regulation that currently governs the production of cosmetics and the operation of cosmetics companies in China. As the Current Regulation is too outdated to deal with new issues that continue to emerge in the cosmetics industry, the second draft of Regulations on Supervision and Administration of Cosmetics(“Second Draft”) was circulated for comment amongst cosmetics industry associations and stakeholders back in August 2018. A final draft is anticipated to be issued in the near future and when this happens it will replace the Current Regulation. For overseas cosmetics manufacturers the Second Draft provides more market access; less red tape and more certainty. On the negative side the Second Draft will increase obligations and expands the types of measures the Chinese authorities can take. However, none of the measures are highly surprising and the triggers for taking action are also reasonable. Few international manufacturers are likely to be anxious about such measures. It would be wise for overseas manufacturers to monitor the progress of the new Chinese regulations on cosmetics as they will not bring just increased levels of responsibilities but very welcome market access and clarity.

On December 6, 2018, the Ministry of Industry and Information Technology (“MIIT”) of the People’s Republic of China (“PRC”) released the Administrative Regulation on Admission of Road Motor Vehicle Manufacturer and Products (“New MIIT Rule”), which will take effect from June 1, 2019. With the aim to address the rapid development of the auto industry, the New MIIT Rule introduced a series of changes to reform the regulatory regime for the market admission of automobile manufacturer as well as the admission of auto vehicle products. It unifies various rules governing admission for different categories of road vehicles into one, and trims down the laundry list of matters subject to MIIT approval so as to reduce the administrative burden on the auto manufacturers. The new changes also addressed recent dynamics of auto industry practice, such as intelligent vehicles, contract manufacture of whole vehicles and upper body of trucks. Large auto group companies will also have greater flexibility in respect of intra-group sharing of production capacity and other functions. We see these as the PRC regulators’ efforts to address innovative development of the auto industry as well as the production overcapacity in the PRC auto sector.

In the past year, the enforcement of China’s Anti-Monopoly Law (“AML”) was characterised by continued activism and a number of new developments. China consolidated the functions of previous three antitrust agencies, i.e. merger review under the Ministry of Commerce (“MOFCOM”), price-related antitrust investigations under the National Development and Reform Commission, and non-price related investigations under the State Administration for Industry and Commerce into a newly established government agency, the State Administration for Market Regulation (“SAMR”). On the merger control front, to deal with an increased number of notified transactions, MOFCOM/SAMR continued to increase case reviewing efficiency and shorten the reviewing time under its simplified procedure. The development and importance of antitrust litigation in China continued its momentum and provided more clarity for the interpretation of the AML. Some of the milestone cases in 2018 include the final trial of Gree and WeChat case decided by the Supreme People’s Court. The authorities in China have also drafted/promulgated a number of new legislative initiatives, seeking to provide further substantive guidance and improve procedural transparency in the anti-trust space.

There are increasingly popular applications of electronic signature, or e-signature, in our daily life in an era of Internet and digital technology. In addition to the e-commerce, it is already a common practice to transmit and retain files in electronic formats for business activities. However, legal instruments which are customarily regarded as more rigorous than e-commerce transactions are still generally forbidden or unnoticed for the application of electronic signature. In practice, the time-consuming traditional approach may not necessarily render a higher reliability. The Electronic Signature Law of the People’s Republic of China, released in 2005 and amended in 2015 (“E-signature Law”) provides legal grounds to determine the validity of electronic legal instruments. As computer science and cryptography advance and technologies become more robust to safeguard e-documents from tampering, public perception has gradually changed, hopefully leading to the popularity of electronic legal documents one day. Based on the E-signature Law, this article provides an overview to e-signature, including its definition, how to create an e-signature, its application and its recognition in judicial practice. We hope our readers may find it useful in the practice related to electronic legal instruments.

On 1 January 2019, the Supreme People’s Court (“SPC”) officially established an appellate-level intellectual property tribunal (“SPC IP Tribunal”), which is somewhat similar to the US Court of Appeals for the Federal Circuit in terms of its function and role, in accordance with the Decision of the Standing Committee of National People’s Congress on Several Issues Concerning Litigation Procedures of Patent and other IP Cases dated 26 October 2018. This SPC IP Tribunal will be subject to a pilot period of 3 years and centralize jurisdiction over appeals involving patent infringement/invalidation and other high-tech or antitrust IP disputes. On 27 December 2018, the SPC issued the Provisions on Several Issues of the IP Tribunal to further elaborate on its jurisdiction, functions and working modes. This article aims to provide a brief introduction to this SPC IP Tribunal in these aspects.

Initial Coin Offerings (“ICO”) hit the global zeitgeist with a bang in 2017. The ICO investment phenomenon coupled with the meteoric rise of cryptocurrencies raised the profile of the underlying distributed ledger and blockchain technologies. However, along with the market boom came the fraudsters. These bad actors moved the PRC government to take the hardline measure of banning all ICOs and their marketing on 4 September 2017. The Blockchain Regulations should give heart to the crypto-community that the PRC authorities are evolving their position in respect of ICOs and blockchain away from the hard ban. In many ways the closest analogy to the Blockchain Regulations is the PRC Cyber Security Law of 2017. Both pieces of legislation sought to regulate new technologies and both were passed and implemented quickly after an announcement of the draft for public comment. As was the case with the PRC Cyber Security Law, the Blockchain Regulations are general but do provide a basic framework for the sector. However, although the trend towards regulation and away from prohibition is clear, it will take time for interpretation and enforcement guidelines to develop. We expect local officials will act conservatively and take a wait and see approach as this area of law continues to evolve.

At the beginning of the Chinese New Year, the People’s Bank of China (the “PBOC“) issued an order (PBOC Order [2019] No.1) and a notice (Notice on Canceling the Corporate Bank Account Permit, Yin Fa [2019] No.41, “Notice No.41“). In accordance therewith, the account opening approval and permit requirement for corporates with legal personality, organizations with legal personality and individually-owned businesses is and will be cancelled step by step. Such relaxation policy has been put into trial in Taizhou (Zhejiang) and Taizhou (Jiangsu) and is being promoted to apply nationwide. The PBOC also promulgated the Administrative Measures for Corporate Bank Settlement Accounts as one of the schedule to the Notice No.41. With the strengthening of the supervision over the Internet finance business and optimization of regulatory policies of traditional banks, the brutal growth of non-financial institutions with the Internet finance business would be effectively curbed and the direct banks would receive more and more business opportunities. This is also a great chance for traditional banks to adapt to the era of the Internet.

The latest Draft Foreign Investment Law will be discussed at the upcoming plenary session of the National People’s Congress on 5 March, 2019. This new version underscores the Chinese government’s intention to further open up its markets to foreign businesses and also addresses issues raised by other countries, such as forced technology transfers. The key issues addressed in the draft law include prohibition against forcing technology transfers; providing equal treatment and market access to foreign companies (except for certain sectors specified on a negative list) but also reserving China’s right to retaliate against companies from countries which discriminate against Chinese investors. From a VIE perspective the original Draft Foreign Investment Law was colloquially dubbed by a number of hysterical commentators as “the VIE killer”. However, as its successor has dropped any reference to VIEs we believe it should be business as usual. From the standpoint of foreign investors, the key concern in a VIE structure is the enforceability of the contractual arrangements – these are core. We expect as China continues to open its market and the market becomes increasingly attractive where foreign investors facing restrictions will opt for “clever” VIE models. “Clever” will mean that the foreign investor will weigh whether it is practically feasible for a VIE; if it has found the right nominee shareholder and bespoke contractual arrangements and operational controls so risk is mitigated.

The National People’s Congress of the PRC (the “NPC”) approved the Foreign Investment Law of the PRC (the “FIL”) at the closing meeting of the second session of the 13th NPC on March 15, 2019. FIL will come into force on January 1, 2020. Upon taking effect, FIL will replace the three existing laws on foreign investment in China, namely the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Contractual Joint Ventures and the Law on Wholly Foreign Owned Enterprises, and become a fundamental law of China in the foreign investment area. The reform of the foreign investment administration regime is a project of great systematic significance. Foreign investors should pay close attention to the relevant provisions of FIL and the upcoming implementation regulations and measures, and monitor further revision and amendment of the Existing Foreign Investment Regulations. Existing FIEs should adjust their charter documents, organizational forms, corporate structures and other matters in a timely manner accordingly. This article provides a high-level overview of FIL and analyzes the changes and challenges that investors, authorities and practitioners may need to address under the new law.

The Hong Kong International Arbitration Centre (“HKIAC”) becomes the first international arbitration institution to be recommended to administer arbitrations in the Russian Federation. Since 2015, foreign arbitration institutions must be on an approved list of permanent arbitration institutions (“PAIs”) in order to administer Russian-seated arbitrations. On 4 April 2019, the Council for the Development of Arbitration to the Ministry of Justice of the Russian Federation recommended that HKIAC be granted PAI status. The Russian Ministry of Justice is expected to approve the recommendation by 25 April 2019. Given the growing trade between China and its Russian speaking neighbours, PAI status will undoubtedly increase the attractiveness of HKIAC as an institution of choice for disputes involving Russian or CIS parties and Chinese counterparties seeking to agree a reputable institution on Russian territory. As the Belt & Road Initiative provides economic opportunities for companies from both countries, and as companies from Russia expand into Asia and Chinese companies increase their presence in Russia, Hong Kong RAS looks to play a key role in the resolution of disputes arising from that cooperation and expansion.

Approved and announced by the Standing Committee of National People’s Congress on April 23, 2019, new amendments of Chinese Trademark Law become effective on November 1, 2019. Focusing on the attempts to stop trademark squatters and trademark infringement, six articles of the current Trademark Law are amended. According to the amendments, any trademark applications which are filed in bad faith for purpose other than use should be rejected (Article 4). Accordingly, any such application can be opposed by anyone within opposition period (Article 33), or can be invalidated after its registration (Article 44), and administrative warning and/or penalty may be issued for such kind of bad faith applications (Article 68). Furthermore, any trademark agencies shall not accept the entrustments from the applicants of such applications (Article 19). The new amendments will provide stronger protection to the trademark owners in good faith. Said new amendments will take effect from November 1, 2019, but the rejection of applications which are obviously filed by trademark squatters seems having already been started.

Many Western cosmetics companies considering China are facing a dilemma: seek revenue or stick to their principles? On one hand, China represents the single greatest market in the world for cosmetics. On the other hand, China still requires animal testing for cosmetic products which is not only problematic ethically but may also lead to a consumer backlash in established Western markets. The two solutions used by international brands to avoid animal testing on cosmetics in China are local manufacturing; and selling overseas products to customers directly via cross-border e-commerce. There is a clear trend in China away from animal testing. This is due mainly to changing sentiment on the part of Chinese consumers. Local authorities across China are developing cruelty-free programs to entice international brands into China. However, the system in China tends to allow authorities broad discretions. Accordingly, those awaiting a clear legal prohibition across the whole country may be waiting a long time. However, brands torn between revenue and conscience may consider whether cross border e-commerce or producing locally are possible solutions. Any brand with great ambitions for China will likely need to pursue domestic production. In addition, domestic production may allow brands to tweak products for Chinese consumer trends. The risk in this regard is that product localization may not receive a warm welcome from Chinese consumers. Many still have great enthusiasm for imported cosmetics. This is especially the case in respect of luxury or organic cosmetics brands.

It has been more than two months since China’s new Foreign Investment Law (FIL) was passed at the second session of the 13th National People’s Congress (NPC) of China on 15 March 2019. Some thought the FIL was an indication that the US-China trade talks would soon be wrapped up. This is unlikely. Despite this the FIL has shown China reiterating a willingness to deepen reform and open up its economy. There has already been a noticeable trend in China over the last 20 years of the authorities opening China’s market to foreign investment. The world’s biggest market still presents challenges but for most sectors there are limited legal hurdles to overcome. Most sectors are already open to foreign investment (i.e. no prohibition or requirement to have a Chinese partner) and indeed most foreign-invested enterprises (FIEs) established in China are wholly foreign-owned enterprises (WFOEs). It is no doubt that the FIL will reshape the Chinese foreign investment legal regime and will formulate the new landscape of China’s foreign investment in the long run. The keenest and most immediate impact FIL will not be felt by those watching from afar or considering entering the Chinese market. While for the nearly 300,000 China’s FIEs especially the existing joint ventures, their shareholders will have the opportunity to restructure the management and corporate governance of their joint ventures in a far more flexible fashion. We believe such changes may not be achieved overnight and both the Chinese and foreign shareholders will need to weigh in their bargain power, interdependency and core interest when striking a deal.

China and India have been trading goods for centuries including along the historical “Silk Route”. China is India’s largest trading partner with the balance of trade in favor of China. India trades more with China than it does with the US and the UAE (the next two largest trading partners). Chinese investors want to be a part of the India growth story including in the technology sector. China has adopted a “walled garden” policy whereby certain sectors are reserved for Chinese companies. In contrast, India has utilized a modified open door policy where US companies have had a deep presence in the Indian technology sector, initially using India as an outsourcing center for technology development but later capitalizing on the growth of the Indian market itself. Recent geopolitical events have led to China seeking to expand its trade relations with India. China and India have adopted different strategies for the growth of their respective technology sectors. Chinese investors want to be active participants in the Indian technology ecosystem.

In today’s global corporate world, many conglomerates have complex and layered shareholding structures with multiple entities in various jurisdictions. Each entity must function as part of a cohesive whole within the larger global group, but will still be governed by company laws or other laws of its respective local jurisdiction. In international M&A deals, parties sometimes approach the corporate governance of a foreign entity (and correspondingly, negotiations of shareholders agreements, joint venture agreements and other matters) by using principles and concepts that they are familiar with in their domestic jurisdiction. These cultural differences can cause misunderstandings, complicate negotiations, and create friction during post-completion integration. The differences discussed above will take on additional significance following the upcoming implementation of PRC’s new Foreign Investment Law on 1 January 2020, which will require that all foreign-invested companies in China be governed by the PRC Company Law. This article briefly compares some key differences between PRC companies and common law companies.

Autonomous vehicles on roads seems inevitable. In the development of autonomous driving technology, the capability of an autonomous vehicle to “see” and “understand” its surroundings is a prerequisite for the vehicle to making right decisions when driving. Sensors are the eyes and ears of autonomous driving. Information collected by the sensors will need to be processed by software algorithm to enable the vehicle to understand the information and act accordingly. However, both driving a car on China’s public roads to collect data through sensors equipped on vehicles (“Data Collection”) and transferring such data abroad (“Data Transfer Abroad”) may give rise to legal risks under PRC law. Collecting such data by driving a car on China’s public roads will have legal implications in respect of surveying and mapping, China’s restrictions on foreign investment and privacy. Entities that have such data collection plan in China should consider these potential legal risks and adopt mitigation measures to reduce the level of risk.

It has been years but many people might still recall the melamine scandal. As part of the efforts to rebuild the food safety system, infant formula registration was firstly introduced in the Food Safety Law (2015). This registration mechanism aims to enhance the safety of the formula industry by setting higher thresholds for infant formula manufacturers, and kicking out those lack sufficient capabilities in safety control and technologies. Apparently, this is not an easy task, as it nearly reshaped the benchmark for all infant formula companies, both domestic and international. CFDA (now being restructured in State Administration for Market Regulation) has promulgated a series of registration rules, implementation notices, protocols, transition polices over the years, and in the end the final and official deadline was set as 1 January 2018, after which no infant formula products can be sold through general trade without formula registration. Formula registration has become a fundamental part of operation for those infant formula companies. Companies should be prudent in this regard and take formula registration into consideration in all the major transaction arrangements, to avoid systematic risk incurred to their business operation.

Early on the morning of June 13, 2019, Cyberspace Administration of China (“CAC”) issued the Measures for Security Assessment for Cross-border Transfer of Personal Information (Draft for Comment) (the “Draft Measures”). The Draft Measures makes significant adjustments to the Measures for Security Assessment for Cross-border Transfer of Personal Information and Important Data (Draft for Comment) released on April 11, 2017. In terms of the structure, cross-border transfer of personal information and important data is likely to be regulated separately and no longer governed by a single legislation in the future. This can be seen obviously from the Administrative Measures for Data Security (Draft for Comment) previously issued by CAC and is further confirmed by the issuance of the Draft Measures. In terms of the regulatory approaches, on the one hand, the Draft Measures innovatively regulates network operators and overseas recipients through contract concerning their cross-border transfer of personal information to protect the security of such transfer. On the other hand, the Draft Measures also establishes a full-coverage and comprehensive application for approval mechanism for cross-border transfer of personal information. Overall, due to the wide scope of application, the Draft Measures will have a significant impact on the compliance of enterprises.

2019 has already seen substantial developments around compliance and several major enforcement actions arising out of the Foreign Corrupt Practices Act (“FCPA”). When the U.S. Department of Justice (“DOJ”) relaxed the “all or nothing” requirements for corporations to receive cooperation credit when identifying individuals involved in corruption allegations in late 2018, it remained to be seen how the new policy would be implemented. As we approach the midpoint of 2019, it is still too early to tell what the full ramifications of the relaxation of the cooperation requirements will be, but it is clear that the Securities and Exchange Commission and DOJ have no intention of relaxing when it comes to enforcement of the FCPA’s anti-bribery and accounting provisions. This report provides a brief overview of the FCPA, then discusses a recent revision to DOJ policy relating to the FCPA. This report also reviews a number of corporate and individual DOJ enforcement actions that have been resolved in the first half of 2019. Finally, the report notes several ongoing FCPA cases to watch in the second half of the year.

A few days ago, the Chinese government announced a series of measures to further open up China’s financial markets and financial services sector to foreign investment and participation. Overall, the announced measures continue the trend of the gradual opening up of China’s economy. They present significant business opportunities for foreign investors that wish to access China’s massive (and rapidly growing) financial markets, and for financial institutions that wish to enter or expand their presence in China’s financial services sector, which serves a growing list of multinational companies and a burgeoning, educated and tech-savvy middle class. The announced measures will not only present new business opportunities for foreign entities, they will also allow Chinese financial institutions to partner with, and attract capital from, foreign investors in new and exciting ways. This article provides an overview of the announced measures and their key implications for foreign financial institutions and investors.

The National Medical Products Administration (“NMPA”) has newly released Measures for the Administration of Filing for Non-Special Use Cosmetics (Draft for Comments) (“Measures”) on 23rd of May 2019 which expressly provides that non-special use cosmetics (such as shampoo, perfume, cleanser, etc.) are exempt from toxicology tests if relevant safety requirements can be met. The Measures do not apply to special use cosmetics such as sunscreen or hair dye products. Despite this the Measures are extremely important and sends a strong and clear signal to the cosmetics industry that the Chinese authorities are taking steps towards a cruelty free approach. In addition to representing ground-breaking progress in respect of animal testing, the Measures also set out a series of other major changes to and improvements in respect of the filing procedures for non-special use cosmetics. This is the first time the Chinese authorities have explicitly on the record opened the door to excluding animal testing for imported cosmetics products across the country. This also further evidence a trend in that the Chinese authorities are s experiencing a strategic shift in regulatory thinking, moving from strict pre-entry control to a more balanced combination of pre-market regulation and active and on-going post-market supervision. For international cosmetic companies, this may make the Chinese market more attractive for cruelty free brands. However, issues will still exist but the direction at least should be applauded.

On 30 June 2019, the National Development and Reform Commission and the Ministry of Commerce jointly issued the Special Administrative Measures (Negative List) for Foreign Investment Access (2019 Edition), the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2019 Edition) and the Catalogue of Encouraged Industries for Foreign Investment (2019 Edition) for the purposes of further promoting the reform and opening-up of the service industry, relaxing the restrictions on the access to the mining, agricultural and manufacturing industries, and continuing to facilitate Free Trade Zones’ role of the opening-up test field . These new policies will take effect on and from 30 July 2019. The 2019 Negative List delivers clear message to the market that the Chinese government encourages foreign investors to participate in the development of oil and gas resources, including coalbed methane (“CBM”). To achieve such purpose in a meaningful way, a timely reform of the regulatory regimes concerning PSCs and the granting of CBM mineral rights should indeed be put as a priority item on the reform agenda of the relevant Chinese government authorities.

On July 17 of the year 2019, the Ministry of Public Security held a press conference in Beijing, announcing that 12 policies on immigration and exit-entry facilitation that had been piloted in some areas of 16 provinces and cities would be promoted and implemented nationwide from August. A foreigner may apply for permanent residence if he/she meets the standards of job, period of residency, salary, and tax. Under the new policies, high-level foreign talents and Chinese of foreign nationality are treated favorably, and foreign students and ordinary foreigners working in China also benefit from it. For employers, the new policies can trigger foreigners’ enthusiasm to work in China while facilitating employers’ recruitment of interns from abroad. The new policies also strike down the requirements of employer type for employment-type applicants, making it possible for ordinary enterprises to compete equally with government sectors and high-tech enterprises in the talent market. Since the new policies list very general standards about the recognition of different types of talents, employers and foreign employees are expected to pay further attention to specific local regulations in the future. Meanwhile, the new policies are not a simple duplicate of the old ones, but a summary and adjustment of the policies of pilot areas. Therefore, even employers and foreign employees in pilot areas should also pay attention to the differences between the new policies and local pilot policies and keep track of future changes of local policies.

The newly revised Drug Administration Law (“New Law”) will come into effective on December 1, 2019. Compared with the current Drug Administration Law, significant changes with respect to the framework and the specific content have been made in the New Law. In response to the major issues in the current pharmaceutical industry, the New Law adopts several new systems, which are becoming more in line with international standards. For instance, the New Law establishes the drug marketing authorization holder system, the drug traceability system, the first accountability system, the innovation of evaluation and approval system, the unified quality management system for drug retail franchise operation and regulations of online drug sales etc. Furthermore, the New Law cancels the Good Supplying Practice and Good Manufacturing Practice certifications and adopts stricter legal liabilities. In addition, the New Law stipulates that entities or individuals importing a small amount of drugs without an importation certificate may be exempted from punishment. The New Law marks a profound change in the pharmaceutical industry. The new systems bring new challenges; the pharmaceutical enterprises need to pay close attention to the implementation rules of the New Law as they will be successively issued by the legislator in order to understand and implement the those rules. In addition, pharmaceutical enterprises will need to adjust their practical operations regarding process and management, based on the requirements of the relevant laws and regulations.

Given the significant levels of early international support for the Singapore [Mediation] Convention and the growing popularity and success of international commercial mediation, tiered dispute resolution clauses (“TDRCs”) are very much in focus. TDRCs are contractual provisions setting out a series of alternative dispute resolution steps that parties must take whenever a potential problem or dispute arises prior to commencing any formal legal proceedings. TDRCs are a way of forcing parties to communicate and settle issues amicably so that their working relationship might continue to function. Quite simply, TDRCs allow potential disputes to be addressed quickly and informally so that problems are solved before they get out of hand, working relationships are protected and time and money is not wasted. An English high court judgment from last month that both underlines the courts’ strong support for alternative dispute resolution and TDRCs, and highlights the requirements to make sure that TDRCs are enforceable. This article summarizes four tips to bear in mind when drafting an enforceable TDRC.

Under normal circumstances, Original Equipment Manufacturer(OEM) refers to the situation where a Chinese manufacturer enters into an entrustment contract with an overseas company that owns the trademark(s), sometimes in China but in most cases, in other jurisdictions. The Chinese manufacturers are required to produce or process products according to the requirements of this overseas company, attach its trademark(s), and deliver all products to another country designated by this overseas company with no sales in China. Things become complicated when the overseas’ company’s trademarks registered outside China are registered by a third party which has no relation with the overseas company at all in China. According to the current statutory law in China, there is no clear provision regarding whether or not the aforesaid scenario constitutes trademark infringement by the OEM manufacturer or the overseas company against the owner of the registered trademarks in China. The question can be at least considered at two tiers: firstly, whether the use of a mark in OEM activities is the use of a trademark as defined under the PRC Trademark Law; and if yes, then secondly, whether said uses constitute trademark infringement. The Supreme People’s Court of the PRC (“SPC”) answered in the affirmative at both tiers in its latest judgement delivered in a trademark infringement case. This article summarizes the reasoning of SPC in a relative case.

On July 9, 2019, the General Office of the State Council issued the Guiding Opinions on Accelerating the Construction of a Social Credit System and Building up a New Credit-Based Regulatory Mechanism (the “Guiding Opinions “), for the purposes of strengthening regulatory capabilities, improving the market order, optimizing the business environment and promoting high-quality development. The Guiding Opinions establishes a new regulatory mechanism, linking up all ex ante, interim and ex post regulatory stages. It also strengthens a new regulatory mechanism supported by “Internet + Regulation” model for the development of credit-based supervision. Firstly, the new credit-based regulatory mechanism involves a wide range of industries, sectors and regions. Secondly, the new credit-based regulatory mechanism may have an extensive influence on enterprises. Finally, Enterprises with good credit records and those with illegal or dishonest conduct may be faced with significant differences in regulatory intensity and market conditions. Therefore, we kindly suggest that all enterprises evaluate and consider the requirements of the new credit-based regulation, and actively participate in and take advantage of the mechanism.

On 1 November 2019, the Ministry of Justice released the Implementing Regulations for the Foreign Investment Law of the People’s Republic of China (Draft for Comment) (“Draft Regulations”) which were jointly drafted by the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission. The Draft Regulations clarify the PRC Foreign Investment Law which will come into force on 1 January 2020. The Draft Regulations coupled with a slew of regulations in respect of foreign exchange are largely positive for foreign investors looking at or already in China. Indeed, in theory, the relaxation in respect of foreign exchange remittance may be helpful for foreign investors looking to leave China. The relative slowdown in China coupled with over ambitious expansion plans in the early 2000s means that many foreign investors have excess capacity which they need to reduce. The provisions should ease the transfer of funds overseas. There is a lot positives in the Draft Regulations, for example more level playing field, better IP protection, great ease in transmitting funds overseas and tacit acknowledgement of the VIE structure etc. However, the main issue is whether the actual implementation on the ground will match the ambition of the regulations. Most decisions are made locally, so it is unclear whether the local authorities will support the greater flexibility afforded under the Draft Regulations or will they continue in their old ways. Time will tell.

At the end of October, 2019, the Department of Fund and Intermediary Supervision of the China Securities Regulatory Commission (“CSRC”) promulgated the Notice on the Pilot Implementation of the Public Offered Mutual Fund Investment Consulting Business ( the “Notice”) and the mutual fund investment consulting business (“MF Consulting Business”) is officially put into pilot implementation. The Notice provides specific guidance on how to conduct the MF Consulting Business. Qualified Institutions are entitled to apply for the MF Consulting Business qualification in order to advise their clients on the mutual fund investment portfolios and strategies, and subscribe, redeem, convert or otherwise trade the mutual funds for and on behalf of their clients (which is similar to a “Discretionary Mandate”). Before the promulgation of the Notice, institutions may only issue wealth management products to manage the investments for their clients, and the underlying investments are held by the wealth management products, while the clients only own the shares of the wealth management products instead of the relevant underlying investments directly. Now, for the first time, the Notice enabled the “Discretionary Mandate” business model by allowing investment consultants to, under the authorization granted by the clients, operate the clients’ account(s) directly. Under this model, the clients will be documented as the direct holder of the underlying investments and there is no need for the relevant institutions to issue the wealth management products any more.

Recently, Guangzhou IP Court ruled on its first trademark infringement and unfair competition case regarding parallel import, in which it found such acts should neither constitute trademark infringement nor unfair competition. Parallel import generally refers to “to import products that are legitimately manufactured abroad without the consent of the IP rights owner”. Judicially speaking, China does not have definite opinions on the legitimacy of such acts. In this recent case, both Guangzhou Nansha District People’s Court and Guangzhou IP Court decided that under the condition that the parallel imported products are genuine products legitimately manufactured abroad, parallel import shall neither be considered as trademark infringement nor unfair competition. This article summarizes the reasoning part of the two instances of courts.

The past five years witnessed a boom in the online education sector in China, and the rapid expansion is attributable to consumers’ love of the internet, the continued growth of the middle class combined with the high regard in which education is held in China. However, the online education regulatory regime has not matched the sector’s speedy development. The regulations remain fragmented and spread across a variety of regulations that govern online activities more generally. Curiously for a business that combines two highly sensitive areas of the Chinese economy-the internet and education-online education was only first officially addressed in 2018. To some extent the PRC regulators are catching up as they have issued a slew of regulations in order to better regulate online education. The regulations acknowledge the hybrid nature of online education as a number of different authorities are cooperating in building the regulatory framework.

Online education marries two of the hottest sectors in China – education and the internet. Although one may not immediately link the two sectors, they do share a lot in common. Both are strongly supported by the PRC authorities but also subject to increased scrutiny. In addition, education and technology closely touch the lives of most Chinese consumers. Although the initiatives are varied, such as encouragement for technology playing an expanded role in education; cooperation between PRC authorities and better regulation, there are some common themes. Both technology companies and education institutes face new opportunities in China. However, the opportunities will also result in greater requirements for registration and ensuring compliance, especially with privacy requirements. Furthermore, PRC authorities do recognize that technology and education often intersect and this is reflected by the increased collaboration in such regard. This article summarizes the variety of recent initiatives related to how education is envisioned in China.

On December 10, 2019, the IP Tribunal of Supreme People’s Court of China (“the Court”) announced the final judgement for the appellate case with respect to patent infringement dispute between the appellant Company A and the appellee Company B. The biggest breakthrough of this case is the extensive interpretation made to Article 11 of the Patent Law of the PRC. The Court substantially made an extensive interpretation for the “use” of patented method as stipulated in Article 11 of the Patent Law, and establishes a “non-substitutable material role” rule for finding infringing acts for method patents. The court judgement of this case was made by the IP Tribunal of Supreme People’s Court of the PRC, which is the present uniform appeal tribunal for all patent cases in China. Therefore, the judicial principles and rules reflected in this case will have substantial influence for all the Chinese patent trial courts in finding infringing acts for method patents.

On December 31, 2019, the State Council of China published the Implementing Regulation for the Foreign Investment Law of the PRC (the “FIL Implementing Regulation”). The FIL Implementing Regulation, together with the Foreign Investment Law (the “FIL”), came into force the very next day – January 1, 2020 – heralding a new era of foreign investment regime in China. The key word for the new regime is “national treatment”, replacing “governmental approvals”. The foreign investment vocabulary will also receive an overhaul, concepts such as “Sino-foreign joint venture”, “total investment” and “joint venture contract”, which were specifically used for Sino-foreign joint ventures, will phase out. This long-awaited regulation introduces a new regulatory regime, setting out detailed rules on certain issues touched on by the broad strokes of the FIL. On the other hand, it remains silent on a number of sensitive topics closely watched by the business community. This demonstrates the Chinese government’s commitment to improve overall environment for foreign investment while remaining prudent when facing complicated issues regarding foreign investment regulation, all against the bigger picture of the ever-changing landscape of international relations.

On January 3, 2020, the China Banking and Insurance Regulatory Commission (the “CBIRC”) published the Guiding Opinions on Promoting the High-Quality Development of the Banking and Insurance Industries. The Guiding Opinions encourage foreign funded institutions to participate in the wealth management business in various aspects, without prejudice to the policies prescribed in the “11 measures” issued by the Office of Financial Stability and Development Committee of the State Council in July, 2019. The main measures are fourfold. First, foreign funded banks are encouraged to collaborate with their parent banks in the featured business including the wealth management business. Second, foreign financial institutions are encouraged to make equity investment(s) in the wealth management subsidiaries of commercial banks. Third, foreign asset management institutions are allowed to set up foreign-controlled joint venture wealth management companies with subsidiaries of domestic funded banks or insurance companies. Finally, it is intended that foreign financial institutions with the wealth management business may be attracted to enter into the onshore market.

Corporate compliance is not a new topic. Throughout the law enforcement practices in various jurisdictions, it is evident that a comprehensive setup of corporate compliance system not only helps undertakings respond correctly and proactively when being investigated, but also functions as a basis for self-certification and reduction of high penalties.China’s Anti-Monopoly Law (“AML”) has been implemented for more than ten years. In view of the particularity and complexity of anti-monopoly compliance, enterprises still have many confusions about how to prevent and control anti-monopoly risks. On December 26, 2019, the Shanghai Administration for Market Regulation (“Shanghai AMR”) released the “Shanghai Anti-monopoly Compliance Guide for Undertakings” (“Compliance Guide”) and thus introduced us another guiding reference for corporate anti-monopoly compliance. The Compliance Guide for the first time uses real cases with charts and images to illustrate anti-monopoly risks, enabling undertakings to easily comprehend conducts regulated by the AML. In addition, it provides clues for enterprises to discover anti-monopoly risks and proposed corresponding compliance recommendations.

After the promulgation of the amended Regulations of the PRC on the Administration of Foreign Funded Banks (the “Administration Regulations“) by the State Council on 30 September 2019 and the amended Implementation Rules of the Regulations of the PRC on the Administration of Foreign Funded Banks (the “Implementation Rules“) by the China Banking and Insurance Regulatory Commission on 29 November 2019, the CBIRC promulgated the amended Implementation Measures on the Administrative Licensing Items of Foreign Funded Banks (the “Implementation Measures“) on 26 December 2019 to implement and specify the details of the opening-up policies in the banking industry since 2017 with the aim to optimize the business environment. After the amendment of the Implementation Measures, the Administration Regulations and the Implementation Rules, together with the Implementation Measures, have generally implemented the opening-up policies in the banking industry since 2017, with details specified in several aspects in relation thereto. These provisions are interpreted as leaving flexibilities for the further steps on streamlining administration and delegating powers. The amendments to the three core regulations relating to the administration of the FF Banks set out a great business environment for FF Banks to cooperate and compete with the DF Banks and will, as a result, promote the stable development of the financial market.

China’s government does actively direct industrial policy and the recent Industrial Structure Adjustment Guidance Catalogue (2019) (“2019 Industrial Catalogue”) issued by China’s National Development and Reform Commission (CNDR) which came into force on 1 January 2020 directly affects the cosmetics industry. Based on the 2019 Industrial Catalogue China is set to ban the production of new cosmetic products containing microbeads by 31 December 2020. Sales of existing cosmetic products containing microbeads will be prohibited by 31 December 2022. China’s war on microbeads will first target manufacturing of microbead-containing cosmetics and later the ban will expand to cover sales activities. Few people will be opposed to the ban on microbeads. The regulation is welcome from a number of perspectives – it is good for the environment, it reflects concerns of consumers, it requires companies to be socially responsible and it is further evidence that China takes the environment seriously.

China’s Belt and Road Initiative (BRI) is a monumental global development program initiated to connect China with the world to promote trade, economic integration, and growth. Since its inception by President Xi in 2013, the BRI, set out along ancient land and maritime networks, is now a US$1 trillion project spanning over 137 countries and 30 international organizations. For many investors, particularly Chinese investors, the attraction of South East Asia (SEA) along the BRI is clear. SEA is a large and relatively untapped emerging market experiencing significant economic growth, has relatively lower costs, has a growing middle class, and has huge growth potential. Whilst the general investment outlook for SEA remains cautious due to the US-China trade war and regional geopolitical tensions, the attraction to “go south” has increased in recent times with Chinese companies seeking to hedge their risks, restructure their supply chains, and avoid tariffs arising from the US-China trade war and with the recent uncertainty in Hong Kong. Along with its key focus on infrastructure development and construction, SEA’s key sectors for investment now cover manufacturing, wholesale and retail, technology/media/ telecommunications, real estate and power. In this article, we will discuss the key issues to note in structuring and managing a successful investment in SEA along the BRI.

On January 15, 2020, China and the United States (“U.S.”) entered Phase One Economic and Trade Agreement (hereinafter “Phase One Agreement”). Chapter 1 of Phase One Agreement stipulates undertakings made by China in terms of Intellectual Property. The pertinent laws and judicial interpretations shall be amended soon to localize the requirements of Phase One Agreement in China. China is to set up a specific plan for such localization by middle of March 2020 according to Phase One Agreement, which might be deferred to some extent by outbreak of the coronavirus in China. An IP system more friendly to IP holders will be established in China thanks to these improvements. This article gives some insights from Chinese practitioners about improvements articulated in Phase One Agreement.

This article reviews and highlights the new individual income tax rules and major tax rules issued in 2019, which may impact on foreign companies doing business in China. The PRC Individual Income Tax Law (IIT Law) and its Implementing Regulations were revised in the second half of 2018 and became effective on Jan. 1, 2019. They have profoundly influenced all individual taxpayers and reshaped China’s individual income tax (IIT) regime. At the start of 2019, the long-awaited guidance was issued, which further clarifies the IIT treatment of foreign individuals with no domicile in China. In March 2019, the Ministry of Finance (MOF) and State Administration of Taxation (SAT) released MOF/SAT Announcement [2019] No.34, Announcement on the Criteria for Determining the Duration of Residency of Individuals Without a Domicile in China, and No.35,Announcement on Individual Income Tax Policy Relevant to Non-Tax-Resident Individuals and Tax-Resident Individuals Without a Domicile, which provide detailed and systematic guidance in respect of IIT treatment of foreign individuals.

The year 2019 marks the first complete year of enforcement for the Anti-Monopoly Bureau of State Administration for Market Regulation (“SAMR”)’s since its establishment as well as the start of the second decade of the Anti-Monopoly Law (“AML”). In this year, remarkable progress was made in Chinese antitrust law in terms of legislation, investigation and enforcement, merger control and antitrust litigation.Through institutional reforms, SAMR unified the interpretation of the AML by issuing the Interim Provisions on the Prohibition of Monopoly Agreements, the Interim Provisions on Prohibition of the Abuse of Market dominance and the Interim Provisions on Prohibition of Abuse of Administrative Power. China also have progressed greatly in terms of the antitrust investigation and enforcement, merger control and litigation. After preparation in 2019, SAMR promulgated the Draft Revision to the Anti-Monopoly Law (Draft for Public Comments) (“Draft Revision”) at the beginning of 2020. The Draft Revision clarified many controversial issues in practice, such as adjusting the regulation system of monopoly agreements, leaving room for future interpretation of regulations about “restricting the minimum resale price”; putting forward specific considerations for the determination of market dominance in the internet sector; significantly increasing the penalties for antitrust infringements. It is expected that the revision to the AML will provide some clarity for companies, and the enforcement of the AML will become more stringent in the future.

The novel coronavirus COVID-19 has affected major cities and numerous towns in the PRC and around the world. On 30 January 2020, the Director General of the World Health Organization declared the coronavirus outbreak a “public health emergency of international concern”. As the situation continues to evolve rapidly, the coronavirus outbreak presents not only a public health crisis but also disruptions to businesses and their supply chains. We see clients faced with challenging questions concerning their exposure to liability under contracts of different governing laws entered with Chinese and international parties. In particular, there are concerns that contractual obligations can no longer be fulfilled as a result of the outbreak and consequential epidemic control measures implemented by governments. This article provides practical insights on the scope and operation of (i) force majeure under PRC law, English law and Hong Kong SAR law; and (ii) frustration under English law and Hong Kong SAR law.

The world’s auto market is in the doldrums and China, as the world’s largest auto market, has suffered almost two-years of starkly declining sales and now the novel coronavirus (COVID-19) epidemic has crashed the already anemic sales. The automotive sector has been heading for disruption for some time now. The virus outbreak may have pushed matters further. China signaled its intention to play a key role in the development of autonomous vehicles when on 24 February 2020 eleven central level Chinese governmental departments jointly issued the Strategy for Innovation and Development of Intelligent Vehicles (the “Strategy”). The Strategy sets forth a blueprint as to how the Chinese government will boost the development of autonomous vehicles over the next thirty years.

Foreign investors continue to show strong interest in accessing China’s growing market for non-performing loans (NPLs). So much so that the recent China-U.S. Phase One Trade Deal includes a commitment by China to further open up its NPL market to U.S. firms. Specifically, China has agreed to allow U.S. financial services firms to apply for provincial (and eventually national) asset management company licenses, which would allow them to acquire NPL portfolios directly from Chinese banks. At the time of writing, the first such license has already been granted and more are expected in the future. This article explores the significance and potential business opportunities presented by this aspect of the Phase One Trade Deal.

On February 18, 2020, the Trademark Office(TM office) of the China National Intellectual Property Administration (CNIPA) issued a notice named Online Publication of the Decisions on Trademark Oppositions. TM office announced in the notice as following: To enhance the transparency of the trademark opposition examination, strengthen social supervision, promote law-based administration, we decide to publish decisions on the trademark oppositions online. The decisions will be published on the China National Trademark website within 20 working days after delivered, except certain circumstances. The TM Office’s publishment of the trademark opposition decision this time will make the examination and trial rules clearer and more directional. It is of reference significance for trademark applicants, interested parties and agencies in terms of the invoking of articles of law for opposition and judgment of trademark trial rules.

A Chinese garment enterprise, owns the registered trademark “DEICAE” and its corresponding Chinese trademark “迪赛(DiSai in Pinyin)”. DIESEL S.P.A, a famous Italian garment enterprise, filed an invalidation application against the Chinese trademark “迪赛” of our client, arguing that “迪赛” is similar to its prior trademark “DIESEL”, and thus the disputed mark “迪赛” shall be invalidated. Both China National Intellectual Property Administration (“CNIPA”) and Beijing IP Court supported DIESEL S.P.A ’s arguments. In the second instance of this case, KWM represented our client and put forward several arguments. Finally, Beijing High Court fully supported our arguments, overturning the judgment of the first instance and the sued decision rendered by the CNIPA. The said case is of significant reference to apply for and protect the transliteration trademarks for both Chinese and foreign companies. For both foreign and domestic entities who conduct business in China, Chinese trademarks are very important.

On December 30, 2019, Guangzhou Tianhe District People’s Court issued a judgment granting trade dress protection for two iconic handbag series designed and sold by a famous luxury good company. The distinctiveness determination test in this case is particularly helpful to luxury brands for protecting iconic styles or product series that normally include generic design elements that have been widely used by the industry. After the amendment to the trade dress provision in 2017, PRC courts become more open to the “totality of the circumstances” approach rather than the traditional three-step test, i.e. courts will evaluate all relevant factors together and slightly lower the threshold on the determination of distinctiveness or degree of fame for the trade dress if the defendant’s bad faith in causing public confusion is apparent. This trend is mirrored by another two cases decided in December 2019 by Jiangsu Higher People’s Court and Beijing Intellectual Property Court, which applied the same approach and granted trade dress protection on combinations of generic design elements for a honey product manufacturer and a popular restaurant chain. These illustrate the threshold of distinctiveness for an iconic style or product series with generic design elements under the “totality of the circumstances” approach.

Recently, Guangzhou IP Court ruled on its first trademark infringement and unfair competition case regarding parallel import, in which it found such acts should neither constitute trademark infringement nor unfair competition. Parallel import generally refers to “to import products that are legitimately manufactured abroad without the consent of the IP rights owner”. Judicially speaking, China does not have definite opinions on the legitimacy of such acts. In this recent case, both Guangzhou Nansha District People’s Court and Guangzhou IP Court decided that under the condition that the parallel imported products are genuine products legitimately manufactured abroad, parallel import shall neither be considered as trademark infringement nor unfair competition. This article summarizes the reasoning part of the two instances of courts.

Trademark squatting has been a common occurrence in China for many years, and even been a kind of “business” by trademark squatters, which has caused huge troubles to brand owners. It is not the case, as ordinary people might think, that all types of trademark squatting can be regulated by the explicit provisions of existing laws, otherwise the phenomenon would not be so difficult to eradicate. Recently, the Trademark Review Department of the China National Intellectual Property Administration(CNIPA) held, in the “Decision on the Request for Invalidation Declaration of the “LOVESAC” Trademark under No. 17962803″ and the “Decision on the Request for Invalidation Declaration of the “LOVESAC” Trademark under No. 17962891″, that the registrant of the disputed trademark, knowing the existence of the applicant’s trademark, should reasonably avoid applying for this mark, and thus supported the brand owner’s request for invalidation of the trademark registrations of the squatter, even the goods or services are dissimilar. We understands that this view and the application of the law reflects the strengthening of the current efforts to combat trademark squatting. This article stress the principle of good faith, which is stipulated in the Article 7 of Trademark Law, should be obeyed in trademark registration. In the actual cases, however, the provision of this article is often regarded as a principle clause and not directly applied. By contrast, it is indirectly applied by the application of Article 44.1 of the Trademark Law.

On May 21, 2020, the United States Senate passed the Holding Foreign Companies Accountable Act (the “Bill”) with unanimous consent. If it becomes law, the Bill would apply to Chinese companies, among others, listed on U.S. securities exchanges and require them to comply with U.S. regulatory and audit standards and information sharing, notwithstanding that to do so may result in a breach of Chinese law. The consequence of non-compliance would be a prohibition on the trading of the company’s securities on any national securities exchange or through any over-the-counter method in the United States. The compliance dilemma facing companies reporting in the U.S., but with audited operations in China, is rooted in the tension between the laws of China and the United States. Therefore, unless there is a reconciling and collaborative response at the regulatory level between the two countries, which the CSRC has noted it is keen to pursue, there does not seem to be an apparent path to compliance for a U.S. Reporting Chinese Company who wishes to maintain its U.S. listing status. As such, we anticipate that the Bill, if passed into law, may prompt and accelerate a new wave of “going private” transactions by Chinese issuers listed in the U.S., or moving their listing to a Hong Kong securities exchange, in order to avoid the consequences of a lack of compliance in their respective jurisdictions.

Council of China for Implementing IP Strategy announced the Proceeding Plan of 2020 for Deeply Implementing the National IP Strategy and Accelerating to Build an IP Powerful Country (“the Plan 2020”), revealing reformation arrangements relating to IP for the year of 2020 on multiple aspects, including to deepen reformations in the fields relating to IP and to enhance protections for IP. The Plan 2020, which is closely related to technology-related IP including patents and technical secrets, includes the following aspects: legislations, systems for enforcement, patent prosecutions, judicial protections and administrative protections.

On April 28, 2020, the Supreme People’s Court issued the Provisions on Several Issues Concerning the Trial of Administrative Cases Involving Granting and Confirmation of Patent Rights (I) for public comment by June 15, 2020. This version is the version that the Supreme People’s Court reissued after the old version issued in June 2018. This article highlights the articles in this version of the revised draft that have caused widespread concern with regarding to court discretion, functional features, supplementary test data and prior rights.

On June 15, 2020, the China National Intellectual Property Administration(CNIPA) enacted the "Trademark Infringement Judgment Standard" (hereinafter referred to as the "Standard"), which came into force from the date of promulgation. Within the framework of the Trademark Law, the Standard, based on the guiding function of trademark law enforcement, systematically combed and summarized the beneficial experiences and practices of trademark administrative protection over the years, providing operational guidelines for trademark law enforcement departments to perform law-based administration, helping to improve the trademark protection rule system, solving difficult and complicated problems in law enforcement practice, creating a transparent and predictable IP protection environment for market players, and further enhancing trademark law enforcement and protection. This article will analyse the Standard in terms of the use of trademarks, specific forms of trademark infringement, right holder verification and the prior use defense. 

The Foreign Investment Law of the People’s Republic of China (the “Foreign Investment Law”) that issued last year came into effect on January 1, 2020 together with the supporting Regulations for the Implementation of the Foreign Investment Law of the People’s Republic of China. This have a significant impact on the structure of foreign-invested enterprises(“FIEs”). Although FIEs may choose to amend their articles of association(“AOA”) at any time during the five-year transition period, FIEs consider making amendments as early as possible. Especially for Equity Joint Ventures and Contractual Joint Ventures with both Chinese and foreign shareholders, when amending the AOAs, shareholders are very likely to start new rounds of negotiations on core issues such as power division of enterprise governance structure, rules of procedure, profit distribution, etc. The amendment of the AOA should be started sooner rather than later.

The amendments to the Supreme People’s Court’s Provisions on Evidence in Civil Procedure will come into effect on May 1, 2020 (the “New Evidence Provisions”). This is the first time that the Supreme People’s Court amended this judicial interpretation since it came into effect in 2002. The New Evidence Provisions has 89 amended or new provisions, and one of its significant improvements is the rules of electronic data. With the New Evidence Provisions, in addition to the traditional notarization (e.g. notarized downloads), a litigant will have the following alternatives to secure electronic data evidence in civil proceedings: Print Copy, Timestamp, Blockchain-based Platforms and Online Notarization Platforms. This note will put forward some recommendations on how to secure electronic data evidence as well.

With the extensive use of the Internet technology, online lending business is booming in recent years. The Interim Measures on the Administration of Personal Loans (the “PL Measures”) and the Interim Measures on the Administration of Working Capital Loans (the “WCL Measures”), both promulgated in 2010, are not able to fully satisfy the new business demands and regulatory requirements generated by the technology developments. As a result, there is an urgent need for the regulators to formulate specific rules regulating the online lending business in order to promote the growth of the industry in a sound and compliance manner. On May 9, 2020 the China Banking and Insurance Regulatory Commission (the “CBIRC”) published the Interim Measures on the Administration of the Online Lending of Commercial Banks (Consultation Paper) (the “Consultation Paper”) on its website, soliciting comments from the public officially. The Consultation Paper puts forward specific requirements for each procedure in the lending process based on the nature of the online lending business comprehensively, but the restrictions on the loan purposes and disbursement methods prescribed in the existing laws and regulations still apply in general.

In recent years, the period from acceptance of an invalidation request by the Reexamination and Invalidation Examination Department to issuance of a decision on examination of the invalidation request continues to be shortened. However, since many patent invalidation cases involve civil infringement litigation proceedings, relevant parties still expect the period to be further shortened. To further improve service quality, on June 27, 2017 CNIPA published Methods for Management of Prioritized Examination of Patent Invalidation Proceedings (the Methods), which become effective on August 1, 2017, wherein contents regarding prioritized examination of invalidation request of patents, utility models and designs were added. At present, the Methods have already been enforced over two years. Some problems are hereby introduced briefly.

Most modern states have their own arbitration laws, while also having a relatively high tolerance and support for international arbitration awards. This is because, on the one hand, it is necessary to regulate the arbitration process through domestic laws and regulations, and, on the other hand, the validity of arbitration agreements and the enforceability of arbitration awards needs to be protected to maintain the autonomy and freedom of the contracting parties which are essential to the development of the market economy. However, domestic arbitration laws are generally only effective within the local sovereign borders. To ensure effectiveness and enforceability of cross-border arbitration on an international scale, an international legal system is also needed to coordinate and navigate the domestic arbitration law systems of various countries, and promote international arbitration agreements and arbitral awards to be recognized and enforced with uniform standards worldwide. All this to ensure the effectiveness of international arbitration as a method of dispute resolution. This article focuses on international “hard law” and “soft law” in international arbitration, and explains the role of domestic arbitration laws of various countries in the international arbitration legal system.

There are three major methods of international dispute resolution; namely international arbitration, international commercial litigation, and alternative dispute resolution (ADR). Among these, arbitration is the most popular way of resolving cross-border disputes between states, companies, and individuals. At present, against the backdrop of the Belt and Road Initiative, Chinese companies are increasingly “going global.” Trade and investment activities between Chinese parties and foreign states or enterprises are becoming more frequent. In the face of ongoing and possible future cross-border disputes, many Chinese companies have already agreed with their counterparties to resolve disagreements and differences through international arbitration. However, international arbitration is markedly different from PRC domestic arbitration in terms of applicable laws and procedures; it is possible to regard them as two different systems. In general, Chinese parties and Chinese lawyers do not have a lot of experience in the area of international arbitration. In the past, a lack of understanding of international arbitration procedures and rules has led to disappointing results for many Chinese parties, even in cases with good prospects of success. This article will introduce international arbitration, international litigation and alternative dispute resolution as three methods of civil and commercial dispute resolution mechanisms, with discussing the advantages and disadvantages of international arbitration.

On June 15, 2020, Supreme People’s Court of the People’s Republic of China (the “SPC”) released a draft of the SPC’s Provisions on Evidence in Civil Proceedings Involving IP Disputes for public comments (the “Draft”). The Draft is based on the evidence rules already stipulated in other China laws, and formalizes some special practices on evidence issues in IP disputes. The Draft follows the SPC’s Provisions on Evidence in Civil Proceedings in a four-chapter structure. This note serves as an overview of highlights in these four chapters with our comments.

On 22 May, the Chinese government unveiled its economic and social development blueprint for the year head – the 2020 Government Work Report (政府工作报告). The 2020 Government Work Report reviews China’s development in 2019 and sets out, at a high-level, China’s economic and social development agenda for the year ahead. The 2020 Government Work Report touches on almost every aspect of Chinese economy and society, and could make foreign investors better understand where China is heading towards. This article provides a high-level overview of the key takeaways from the perspective of foreign investors.

“Throughout the world, it has long been an international trend and common practice to conduct cybersecurity review.” On 27 April 2020, the Cyberspace Administration of China, in conjunction with 11 other government agencies, jointly issued the Cybersecurity Review Measures (“Review Measures”). The Review Measures to be implemented as of 1 June 2020 will replace the Measures for the Security Review of Network Products and Services (for Trial Implementation). The Review Measures stipulate the scope of application, reporting procedures, evaluation factors, compliance works (in particular for the protection of the rights and interests of operators of critical information infrastructure and product and service providers), legal responsibilities, etc. in relation to the cybersecurity review, which portends that China’s cybersecurity review has entered a new stage. This article will review the history of the cybersecurity review regime in China, summarize the framework and procedures of the cybersecurity review system determined by the Review Measures, and, based on the comparison with the cybersecurity review regime overseas and the previous Cybersecurity Review Measures (Draft for Comments) (“Draft Review Measures“), discuss how the new cybersecurity review mechanism will provide guidance for relevant market players and industry practice.

Recently, many foreign credit funds have their sights set on the Chinese market. With the further opening-up of the capital account and the Chinese government’s commitment to create a favorable business environment for foreign investment, there are now more channels and methods for foreign credit funds to invest in Chinese assets. The main asset types favored by foreign credit funds are Chinese real estate, non-performing assets and other types of credit assets portfolios, with investments being made using increasingly diversified structures. This article discusses the key channels through which foreign credit funds can invest in Chinese assets and the key PRC legal issues associated with them.

Chinese outbound investment has had its ups and downs in recent years, along with the advancement of the Belt & Road Initiative and suffering a setback with COVID-19. In preparation for a post COVID-19 world, Chinese outbound investors have begun to source for bargain deals in other countries, with markets characterised by corporate restructurings, low prices, depressed valuations, distressed assets, and fire sales. This article briefly sets out some suggestions for Chinese outbound investors when entering into bargain M&A deals in this unprecedented M&A landscape. Chinese outbound investors should choose what they want to buy, re-strategize their due diligence, set the price, and pay attention to insolvency law implications and risks of politicization. In the aftermath of COVID-19, traditional playing fields will be levelled, new opportunities will arise, and valuable assets could become available at attractive prices. At the same time, Chinese buyers would need to be more flexible, be open to new acquisition approaches, and take on unfamiliar risks, all when navigating troubled markets marked by heightened political and cultural sensitivities.

On 5 May 2020, the People’s Bank of China (“PBOC”) and the State Administration of Foreign Exchange (“SAFE”) issued the Regulations on Fund Administration for Domestic Securities and Futures Investments by Foreign Institutional Investors (“New Regulation”, as supplemented with the FAQs published by SAFE), introducing the latest round of reforms to the QFII and RQFII schemes – China’s two major inbound investment systems. The New Regulation will take effect on 6 June 2020. This article summarises the key points of the QFII and RQFII regimes, the main changes under the New Regulation, and what they mean for overseas institutions.

With the extensive use of the Internet technology, online lending business is booming in recent years. The Interim Measures on the Administration of Personal Loans (the “PL Measures”) and the Interim Measures on the Administration of Working Capital Loans (the “WCL Measures”), both promulgated in 2010, are not able to fully satisfy the new business demands and regulatory requirements generated by the technology developments.  As a result, there is an urgent need for the regulators to formulate specific rules regulating the online lending business in order to promote the growth of the industry in a sound and compliance manner.On May 9, 2020 the China Banking and Insurance Regulatory Commission (the “CBIRC”) published the Interim Measures on the Administration of the Online Lending of Commercial Banks (Consultation Paper) on its website, soliciting comments from the public officially.  As the Interim Measures on the Administration of the Online Lending of Commercial Banks is an important regulation to be promulgated, which, among others, is indicated in the legislative plan of the CBIRC in 2020, the release of the Consultation Paper would accelerate the promulgation and implementation thereof.

The cosmetics market in China is growing bigger each year. The Regulations on Hygiene Supervision of Cosmetics (<化妆品卫生监督条例>) (“Current Regulation”) will be replaced by the Regulations on Supervision and Administration of Cosmetics (<化妆品监督管理条例>) (“New Regulation”) which was published on 29 June 2020 and will be enacted from 1 January 2021. The New Regulation is passed in a similar form to the Second Draft with minor changes. For overseas cosmetics manufacturers, the New Regulation provides more market access; less red tape and more certainty. On the negative side, the New Regulation will increase obligations and expands the types of measures the Chinese authorities can take. However, none of the measures are highly surprising and the triggers for taking action are also reasonable. Few international manufacturers are likely to be anxious about such measures. It would be wise for overseas manufacturers to monitor the implementation of the New Regulation as they will not bring just increased levels of responsibilities but very welcome market access and clarity.

As enterprises are increasingly engaged in international trade and investment, international arbitration is recognized as the preferred option in the face of cross-border disputes. However, international arbitration, which differs from domestic arbitration with complex procedures, often put parties unfamiliar with its rules in an inherent disadvantage. Arbitration agreement is the cornerstone of international commercial arbitration which records the parties’ consent to submit the dispute for arbitration. Such consent is the prerequisite for the smooth progress of arbitration proceeding and the recognition and enforcement of arbitral awards. This article will start with a general introduction to the international commercial arbitration agreements, including the definition and elements of arbitration agreements. Referring to New York Convention and UNCITRAL Model Law on International Commercial Arbitration (“UNCITRAL Model Law”), and taking into account the judicial practice of various countries, this article will introduce the principles for determining the validity of international arbitration agreements.

On April 21, 2020, Beijing Higher People’s Court released the Guidelines on Determination of Damages and Statutory Damages in Disputes over Intellectual Property and Unfair Competition (the “Guidelines”). It provides detailed guidelines on methods of damages calculation, punitive damages, recovery of attorney fees, evidence rules on defendant’s failure of producing evidence, and statutory damages. While the Guidelines have binding force among all the courts in Beijing, but it mirrors many existing practices across the country and is actually a secondary authority for all People’s courts. This note serves as an overview of those provisions related to trademark and passing off in the Guidelines followed by our comments and recommendations.

The amendments to the Supreme People's Court's Provisions on Evidence in Civil Procedure will come into effect on May 1, 2020 (the “New Evidence Provisions”). This is the first time that the Supreme People’s Court (“SPC”) amended this judicial interpretation since it came into effect in 2002. The New Evidence Provisions has 89 amended or new provisions, and one of its significant improvements is the rules of electronic data. This note will provide an overview on the new rules related to electronic data evidence, alternatives of securing electronic data under the New Evidence Provisions, and our recommendations.

According to the written decisions of administrative penalty (the “decisions” or a “decision”) of 48 cases published on the official website of the Shanghai Municipal Administration for Market Regulation (the “Shanghai AMR”) in 2019 and relevant policy documents, the medical-related industries were still the focus of anti-commercial bribery enforcement, with 24 cases accounting for nearly half of the total of 2019. In addition to sales of medical devices to non-hospitals and the medical cosmetology industry, there were 16 cases directly related to hospitals. Based on these 16 law enforcement cases, this article discusses the application of anti-commercial bribery laws in the medical field by administrative authorities, in a bid to enhance the accurate application of laws, and to help pharmaceutical companies and medical device manufacturers, distributors and promotion agencies improve their compliance with the law and relevant regulations.

On July 16, 2020, China’s State Administration for Market Regulation (“SAMR“) cleared the merger filing in relation to the Establishment of a Joint Venture between Shanghai Mingcha Zhegang Management Consulting Co., Ltd. and Huansheng Information Technology (Shanghai) Co., Ltd. (“SMZ Case“). In fact, this SMZ Case has attracted widespread attention since SMAR’s formal acceptance of the filing on April 20. This is the first time that Chinese merger control authority(ies) have publicly accepted and unconditionally approved a case involving a VIE structure. Previously, according to the public record, the Chinese authority has never accepted and approved filing transactions involving VIE factors (even though they have met the merger filing thresholds). This article reviews the origins and dilemmas of merger filings involving the VIE structure in China, discusses possible changes of SAMR’s attitudes towards the VIE issue, and sets out some issues yet to be clarified. Companies are recommended to re-assess carefully their future merger filing strategies in China when facing VIE structure issues, and the impact of such changes on their transactions.

As enterprises are increasingly engaged in international trade and investment, international arbitration is recognized as the preferred option in the face of cross-border disputes. However, international arbitration, which differs from domestic arbitration with complex procedures, often put parties unfamiliar with its rules at an inherent disadvantage. An effective arbitration agreement is essential to contracting parties. It provides jurisdiction for the tribunal and is a prerequisite for the recognition and enforcement of arbitration awards of international arbitration institutions across international territories. Although a clear and complete arbitration agreement itself may not guarantee the smooth progress of arbitration proceedings, an ineffective arbitration agreement that lacks essential elements or contains vagueness, will inevitably mean additional disputes, lengthy procedures, higher costs, and even an unenforceable award. This article will introduce the key points of drafting an arbitration agreement, starting from how to choose model arbitration clauses provided by institutions, and will also provide tips for drafting “tailored-made” arbitration clauses.

Transgenic technologies can speed up growth of related varieties, increase yield, and enhance disease resistance and adaptability to the environment. However, the possible impact of transgenic technologies on humans and the ecology is not yet clear, so like most countries and regions in the world, China holds a quite cautious attitude toward the application and supervision of transgenic technologies. Because China’s regulations on genetically modified organisms (“GMOs”) mainly focused on agricultural GMOs (“Agricultural GMOs”), this article will mainly discuss regulatory rules, policies and practice on Agricultural GMOs with regard to research and experiment, production and processing, import and export, labeling and other aspects, and address issues that enterprises may face frequently during operation.

Since the enforcement of the Anti-Monopoly Law of the People’s Republic of China (“AML”) in 2008, there are many related administrative law enforcement and judicial cases occurred. On the basis of a large number of decisional experiences, the State Administration of Market Supervision (“SAMR”) made a big stride in the new year of 2020 and publicly released the Anti-Monopoly Law Revised Draft for Public Comments (“Draft for Comments”). As an “economic constitution”, the AML is not only committed to maintaining market competition order, but also deeply touches the business model and business logic of enterprises. Considering that the Draft for Comments put forward higher requirements for companies’ compliance, this article aims to tailor to such needs, by focusing on the daily operations of enterprises, mergers and acquisitions, establishment of joint venture, cooperation with investigations, and dealing with administrative monopoly. It selects the main points of the Draft for Comments and tries to show the important impact of these changes on business operations and decision-making process.

Recently the trading value of debt securities issued by many corporate issuers within the region, especially privately-owned entities, has significantly declined as a result of the financial market shock caused by the COVID-19 pandemic. This article is intended to provide a general introduction to the legal considerations that may be relevant for corporate issuers in planning a repurchase of non-convertible bonds outside the United States. However, each case is different. Issuers should consult with counsel, investment bankers and other professional advisers to carry out a careful analysis of the factors relating to the repurchase, such as applicable securities laws, tax regulations and potential litigation risks, before commencing any repurchase.

2019-2020 have been challenging years for both China and the world. China has had to contend with both the fallout from the COVID-2019 pandemic as well as the trade conflict between China and the US. China’s response has largely been to think BIG. Regulatory reform, rebalancing a transition to an innovative economy and embracing globalization. In addition China has shown it can still think BIG domestically with the Greater Bay Area initiative. In China the only constant is change! This publication explores the key questions being asked by clients looking to unlock investment opportunities in the People’s Republic of China (China).

The world will be in order if good laws are established. China’s first Civil Code was approved at the third session of the 13th National People’s Congress and will come into force on January 1, 2021. As a fundamental body of law with a solid foundation, stable expectations and long-term benefits, its compilation is a significant milestone for the rule of law in China. The Civil Code consists of seven parts: general provisions, real property, contracts, personality rights, marriage and family, inheritance and tort liability and covers all aspects of individuals’ personal and property relationships. This article aims to highlight the most significant parts of the Civil Code that directly relate to pharmaceuticals and healthcare by comparing those parts with legal provisions that were previously scattered through a variety of pharmaceuticals and healthcare legislation.

On July 27, 2020, the Supreme People’s Court of the People’s Republic of China (“SPC”) issued the SPC Guidelines Concerning Alignment of Application of Law and Strengthening Search of Similar Cases (Trial) (the “Guidelines”), which will come into effect on July 31, 2020. Strengthening search of similar cases is one of the improving measures in the Outlines for the Fifth Five-Year Reform of the People’s Court (2019-2023), and the similar case search has been tested in several people’s courts in different levels for years. This is an encouraging progress in PRC court’s efforts in resolving the issue of “different results on the same issue”, and it is expected to see more transparency and predictability in litigating IP cases before PRC courts.

Recently, the China National Intellectual Property Administration decided that the disputed trademark designated on “shower caps” and the citations designated on “clothing; shoes; hats; hosiery; gloves (clothing); scarves; belts (clothing); down garments; leather belts (clothing); fur coat (clothing)” goods as similar trademarks on similar goods that would cause consumer confusion. Finally, the disputed trademark is determined to be invalidated in the “No. 20148247 ‘地素佳人’ (“DI SU JIA REN” in Chinese Characters) trademark invalidation ruling. This case is a typical example that breaks the Classification Book and provides a new approach to prove bad faith of the trademark applicant.“The intention of confusion” is a strong evidence to claim breaking through the Classification Book and prove the constitution of “similar goods” regulated in accordance with Article 30 of Trademark Law. The goods that has been refused at the stage of examination can be used to deduce the applicant was in bad faith with the “intention of confusion”.

Unlike common law system that belongs to case law, China’s legal system is continental law system, subject to the “statute law”. In the patent granting procedure, only the Patent Law, the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination shall have legal effect in principle. However, judging from our practical experience, the understanding of the same provision may vary depending on different examiners. Examiners are inclined to follow the previous examination practice in dealing with issues that are significantly influenced by subjective judgment. In view of this, proper application of precedents (including reexamination decisions, invalidation decisions and court judgments, etc.) can achieve twice the result with half the effort. On the other hand, some examiners do not like the fact that the applicant cites precedents, and will think that the applicant is pressuring them with irrelevant cases. Thus, citation of precedents does not necessarily produce good inner conviction for all examiners, but sometimes has a negative effect. In practice, patent agents need to consider corresponding strategies based on the comprehensive situation of a case.

The field of biotechnology is growing rapidly and the number of patent applications is skyrocketing. CAR-T, gene editing, and coronavirus vaccines have become hotspots due to their extremely high clinical value or due to epidemic outbreaks. Because of complex ethical issues, the rapid development and the unpredictability of biotechnology, there is particularity existing in the field of biotechnology, which means the policy and criteria of examinations are frequently changing. It would be very helpful for the applicant (or the patentee) to understand the dynamic changes in the examination criteria in the field timely and accurately, so that they can obtain and maintain their patent rights and protect their legitimate rights and interests successfully. This article analyzes the dynamic changes of examination in this field from three angles – sufficiency of disclosure, supportiveness of claims and inventive step, and further provides some strategies and suggestions based on these analyses.

The Announcement on Individual Income Tax Policies Relating to Foreign Income was issued on On January 17, 2020, and further clarifies Chinese individual income tax (IIT) policies with respect to foreign income. Many Chinese people now work abroad with the development and acceleration of outbound businesses. The principle that Chinese tax-resident individuals must pay IIT on their worldwide income, including income sourced within territory of China (domestic income) and income sourced outside China (foreign income) is immutable. At the same time, China allows foreign tax credits for qualified taxes paid outside China regarding foreign income to eliminate double taxation. This Announcement provides detailed guidance on taxation and tax administration on foreign income of Chinese tax-resident individuals, especially in relation to foreign tax credits, in the context of the newly amended IIT Law.

On 20 February 2020, in his annual review "Dedicated to Fair Competition and Serving Reform and Development – Overview of Antitrust Work in 2019", Mr. Wu Zhenguo, the Director of the Anti-monopoly Bureau of the State Administration for Market Regulation , mentioned that the Anti-monopoly Committee of the State Council has issued four antitrust guidelines including the Antitrust Guidelines for the Automotive Industry. This article will review some key issues in the Auto Guidelines, including the approach to market definition for the automotive industry, vertical monopoly agreements in distribution management and the abuse of market dominance in the aftermarket.

Recently, the Anti-Monopoly Guidelines for the Intellectual Property ("IP Guidelines") was published in the Collection of Antitrust Regulations and Guidelines in 2019 released by the Anti-Monopoly Bureau of the State Administration for Market Regulation. The IP Guidelines is divided into five chapters: general rules, intellectual property ("IP") related agreements which may eliminate or restrict competition, IP-related abuses by owners holding a dominant market position, IP-related merger filings, and other situations involving IP-related issues.

On 21 August 2020, The Stock Exchange of Hong Kong(the "HKEx") published amendments to the rules governing the listing of debt securities to professional investors to closer align the rules with current market practice and to enhance the debt listing regime. The changes are to Chapter 37 of the Main Board Listing Rules, which was last updated in 2011, and are the result of a public consultation process culminating in the 21 August 2020 document titled Consultation Conclusions and Guidance. The document summarises the upcoming rule changes and simultaneously promulgates a guidance lette on disclosure which primarily addresses disclosure considerations for debt instruments with special features. Market participants and legal practitioners, including King & Wood Mallesons, provided commentary during the consultation process.

On 30 April, 2020, the China Securities Regulatory Commission and the National Development and Reform Commission jointly released the Circular on Work Related to Advancing the Pilot Program of Real Estate Investment Trusts for the Infrastructure Sector. The authorities launched a pilot scheme for Real Estate Investment Trusts in the infrastructure sector. On the same day, CSRC followed up with the Guidelines for Public Offered Infrastructure Securities Investment Funds (for Trial Implementation)(Draft for Comments) , requesting public comments. The Guidelines clarified the establishment and operation of publicly-offered infrastructure-backed securities investment funds as the carrier of REITs, the performance duties of fund managers and other participants, and details regarding product registration, offering of fund units, investment operation and information disclosure.

The loan markets in the People’s Republic of China (the “PRC”)continued to be active in 2017. In particular, the Belt and Road Initiative proposed by the Chinese Government that focuses on connectivity and cooperation with neighbouring countries in South East Asia, the Middle East, Europe, and Africa, has developed rapidly. Questions related to guarantees, collateral security and financial assistance are answered in this chapter.

Syndicated lending in Hong Kong Special Administrative Region remained strong, particularly in the area of acquisition financings. A company can give a guarantee or grant security over its assets in respect of the borrowings of another member of its corporate group.No governmental approval, consent or registration is required for guarantee. It is possible to take security over almost any type of asset in Hong Kong Special Administrative Region, whether tangible or intangible. Other related questions are answered in this chapter as well.

2017 was a good year for borrowers in Australia with bank funding costs down and a scarcity of assets/names driving better pricing and terms for the borrowers who came to market, together with the emergence of many alternative sources of funding on competitive terms. Some significant lending transactions that have taken place in Australia in recent years. The requirements and enforcement of guarantee are introduces in this chapter. Certain types of collateral are available to secure lending obligations, and other related questions are answered in this chapter as well.

This chapter represents detail knowledge of the crime of money laundering and criminal enforcement in Mainland China. The People’s Procuratorate is the body with legal authority to prosecute money laundering at all levels. Both institutions and individuals could be subject to criminal liability of the crime of money laundering. The Anti-Money Laundering Law and the Counter Terrorism Law set out systematic anti-money laundering requirements for all financial institutions established within the Mainland China and certain non-financial institutions.

This chapter represents detail knowledge of the crime of money laundering and criminal enforcement in Hong Kong Special Administrative Region. Corporate criminal liability exists in Hong Kong, and the offence of money laundering has extraterritorial application. The anti-money laundering regulatory with administrative requirements and enforcement is analyzed, which will have significant effects on financial institutions and other designated businesses. The Anti-Money Laundering and Counter-Terrorist Financing Ordinance imposes legal and supervisory requirements on financial institutions; specifically authorised institutions, stored value facility licensees, licensed corporations, the insurance industry, money service operators and the PostMaster General. There are no cross-border transaction reporting requirements. This chapter also introduces other anti-money laundering knowledge of public concern.

This chapter represents detail knowledge of the crime of money laundering and criminal enforcement. Then the anti-money laundering regulatory with administrative requirements and enforcement is analyzed, which will have significant effects on financial institutions and other designated businesses. Financial institutions and other businesses are subject to anti-money laundering requirements, and some of them should maintain compliance programs and report cross-border transaction according to certain laws and regulations. This chapter also introduces other anti-money laundering knowledge of public concern.

On 15 July 2015, the Supreme People’s Court of China provided clarification on the jurisdictional issues arising from the separation of two sub-commissions from the China International Economic and Trade Arbitration Commission (CIETAC). The clarification comes in the form of a reply to requests from the Shanghai, Jiangsu and Guangdong High People’s Courts for instruction on cases involving judicial review of arbitral awards made by CIETAC and the former CIETAC sub-commissions.  The reply is binding on all lower courts and took effect from 17 July 2015. By providing a detailed response which seeks to address the numerous different circumstances parties could find themselves in, the Supreme People’s Court has sought to remove any residual confusion and provide stakeholders with much sought after certainty.

On February 18, 2019, the Chinese Government released its much-anticipated blueprint for the Greater Bay Area — a thriving and dynamic economic zone that includes major cities such as Hong Kong, Shenzhen, Guangzhou and Macau and a combined GDP of over USD 1.5 trillion. The Greater Bay Area presents significant business opportunities across a broad spectrum of sectors and industries. In this article, we focus on the key takeaways from the Greater Bay Area blueprint for financial institutions and the business opportunities they present.

In a further effort to attract foreign institutional investors to allocate offshore funds into China’s deep equity and debt capital markets, the State Administration of Foreign Exchange (“SAFE”) this past week announced that the Chinese Government will end the system of quotas for both the Qualified Foreign Institutional Investor (“QFII”) and the RMB Qualified Foreign Institutional Investor (“RQFII”) schemes.  As next steps, this reform will be formally implemented by SAFE immediately revising its relevant regulations and applying to the PRC State Council to cancel related approval requirements.

As the world’s largest consumer of energy, with the recently-achieved status of the top natural gas importer in the world, China[1] has seen continued growth in the demand for liquefied natural gas (“LNG”) imports. This has been a key focus of industry participants and an important driver for expansion of the international LNG industry.  Concurrently, China’s need to expand and optimise the utilisation of LNG receiving infrastructure (including terminals and send out pipelines) has assumed central importance in the overall scheme of its energy sector transformation and its tilt towards natural gas as a cleaner fuel source. These plans raise a variety of questions about the general regulatory regime, as well as the availability of third party access and foreign investment in the terminal sector. A detailed discussion of these issues is beyond the intended scope of this article. However, we hope it provides some useful insights into the early steps being taken to open up China’s LNG terminals and gas pipeline network, and key issues for potential foreign (and domestic) investors in the terminal sector.  

Foreign investors continue to show strong interest in accessing China’s growing market for non-performing loans (NPLs). So much so that the recent China-U.S. Phase One Trade Deal includes a commitment by China to further open up its NPL market to U.S. firms. Specifically, China has agreed to allow U.S. financial services firms to apply for provincial (and eventually national) asset management company licenses, which would allow them to acquire NPL portfolios directly from Chinese banks. At the time of writing, the first such license has already been granted and more are expected in the future. In this article, we explore the significance and potential business opportunities presented by this aspect of the Phase One Trade Deal. However, to better understand its implications, we begin with a high-level overview of the existing macroeconomic and regulatory landscape surrounding China’s NPL market. For those who are already familiar with the background, please refer directly to Part II of this article further below.

根据《公司法》第147条的规定，董事、高管应当遵守法律、行政法规和公司章程，对公司负有忠实义务和勤勉义务。根据相关规定，上市公司在公司章程中通常会将前述“忠实义务”和“勤勉义务”进行具体细化规定。在实践中，上市公司的董事、高管出于各种原因，可能存在违法违规行为，并进而对上市公司造成不利影响。本文将结合相关法律规定和项目经验，就董事、高管违规行为可能对上市公司带来的影响略作分析，供分享交流。

自1979年《出口管理法》实施至今，美国建立了目前现行最严密的出口管理体系，与此同时，长期以来，不少中国企业却对美国的出口管制制度缺少必要的认识，以至于屡屡成为美国出口管制调查的重点对象：早在2014年，针对中国的出口管制刑事调查即以仅次于伊朗，位居第二。在此，金杜海关和贸易合规团队将基于美国出口管制的法律法规以及与中国相关的公开案例，细数一下美国出口管制制度中，中国企业关心的那些事。