NEWSLETTER

Transcription

NEWSLETTER

NEWSLETTER
CHINESE LEGAL NEWS
AUGUST 2011
Foreign
Direct
Investment in China
■ Catalogue of Industries for
Guiding
Foreign
Investment
Amendment Draft
The Catalogue of Industries for Guiding
Foreign Investment has been revised
recently by the National Development and
Reform Commission (NRDC) and the
Ministry of Commerce (MOFCOM) along
with
other
related
government
departments jointly. Its latest modification
was made in 2007. The amendment draft
has been announced for collection of
st
th
public opinions from 1 April until 30
April 2011. New notable amended
provisions include:
a) Foreign
investments
in
the
construction and operation of villas,
which were previously restricted
under the Catalogue, are now
prohibited.
Comments: With the strict regulation
of the real estate market by the
Chinese government, the proportion
of foreign investment in the total
investment amount of Chinese real
estate industry reduced from 33% in
2007 to 12% in 2008 and 2% in 2009.
This new amendment is in line with
Chinese regulatory restriction policy
on real estate industry. Beside the
restriction on foreign investment, the
domestic capital’s access to the
construction and operation of villas is
also restrained by the Chinese
government.
b) Foreign investments in the medical
treatment establishments, which were
previously restricted under the
Catalogue, are no longer restricted.
Comments: It can be regarded as a
signal and state regulatory guidance
for opening the medical institutions to
foreign capital for improving the
medical treatment service standard in
China.
c) Domestic express delivery service
has been added to the prohibited
foreign investment industries under
the Catalogue.
Comments: The addition of this
industry sector into the prohibited list
shows that Chinese authority would
like to take more strict monitoring
measures to regulate and control the
domestic express delivery service.
d) Foreign investments are encouraged
in
the
following
industries:
manufacture of key spare parts for
new
energy
automobiles
(the
proportion of foreign investment shall
not exceed 50%); recycling and
treatment of waste plastics, electronic
products, rubber, metal and batteries,
etc.
Comments: Adding these industry
sectors into the encouraged list
indicates that Chinese government
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Newsletter –August 2011
expects and encourages foreign
investments in the new energy,
technology
and
environment
protection industries. On the contrary,
with the rapid development of the
automobile industry in China, the
manufacture of complete automobile
has
been
deleted
from
the
encouraged industry list under the
new amendment draft.
e) Moreover, occupational skill training
has been added to the encouraged
education industry, and venture
capital companies and intellectual
property rights service have been put
into the encouraged service industry
sectors. The restriction on financial
leasing companies has been removed.
Comments: From the aforesaid
amendments, it is clear that Chinese
government regulates the foreign
investment’s
access
to certain
industries in accordance with the
notable results of development and
readjustment of the industry structure.
In conclusion, it is anticipated that the
reform will aim at optimization of the
allocation of resources, enhancing the
surveillance of foreign investments in the
new energy,
energy saving
and
environment protection industries and
promoting the technical progress.
The exact date of promulgation and
coming into force of the new Catalogue is
not yet fixed.
■ Establishment of the Security
Review System for Mergers and
Acquisitions
of
Domestic
Enterprises by Foreign Investors
To guide the orderly development of
mergers and acquisitions of domestic
enterprises by foreign investors and
safeguard national security, the Notice of
the
Relevant
Matters
on
the
Establishment of a Security Review
System for Mergers and Acquisitions of
Domestic
Enterprises
by
Foreign
Investors was issued by the general office
rd
of the State Council on February 3 2011
and came into force one month after the
date of issuance.
Furthermore, the Ministry of Commerce
promulgated Interim Regulations on
Matters Relating to the Implementation of
the Security Review System for Mergers
and Acquisitions of Domestic Enterprises
by Foreign Investors. Accordingly, the
foreign investor shall file an application for
M&A security review with the Ministry of
Commerce.
The main key points of the new security
review system:
1. The scope of security review of
mergers and acquisitions
The security review applies to the
following mergers and acquisitions:
foreign investors’ mergers and
acquisitions of domestic military
industrial enterprises and supportive
military
industrial
enterprises,
enterprises surrounding major and
sensitive military facilities, and other
entities relating to the national
defense security; foreign investors’
mergers and acquisitions of domestic
enterprises relating to important
agricultural
products,
important
energies and resources, important
infrastructural facilities, important
transportation
services,
key
technologies, manufacture of major
equipment, etc., which relate to the
national security, and whose actual
controlling power may be obtained by
foreign investors.
2. The contents of security review of
The influence of M&A transactions on
the national defense security, the
stable operation of the national
economy, the order of basic social life
and the capacity of research and
development of key technologies
involving national security.
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3. Security review mechanism
for
A system of joint ministerial meeting
for the security review of mergers and
acquisitions of domestic enterprises
by foreign investors shall assume the
specific work.
4. Procedures for the security review of
A general security review and a
special review shall be applied to
different situations.
It should be noted that the legislative aim
of security review system is to adjust M&A
structure but not to restrict foreign capital
investment in China according to the
comment of the officer in MOFCOM.
According to the new security review
system, if the M&A transaction has
produced or may produce a significant
impact on the State national security, the
joint ministerial meeting shall require
Ministry of Commerce along with the
relevant departments to terminate the
transaction, or transfer the relevant
equities or assets or take other effective
measures to eliminate the influence of
such transaction on national security.
■ Draft of Measures
Administration
of
Contribution involving
Investment Enterprises
for the
Equity
Foreign
The Draft of Measures for the
Administration of Equity Contribution
Involving Foreign Investment Enterprises
(hereinafter referred to as ‘Draft’) was
announced by the Ministry of Commerce
for public comments in May 2011.
The Draft focuses on related examination
authorities, legal requirements, and
detailed procedures.
The Draft clearly stipulates that the
foreign investors can use their equities of
Chinese enterprises within the Chinese
territory as the capital contribution to: i)
newly set up foreign investment
enterprises (hereinafter referred to ‘FIEs’);
or ii) raise the registered capital of an
existing Chinese enterprise and therefore
change the nature of such enterprise into
a FIE; or iii) raise the registered capital of
an existing FIE and therefore change its
shareholding structure.
For foreign investors, equities investment
may expand the source of funds and
diversify the financial management
methods, provide new ways of merger
and acquisition as well as promote the
implementation of assets restructuring
and reorganization.
From a legislative point of view, the Draft
can be regarded as the detailed
refinement provisions based on ‘Several
Opinions on Further Improving the
Utilization of Foreign Investment’ issued
by the State Council in April 2010.
■ Notice of Ministry of Commerce
for the Administration of Foreign
Investment
Ministry of Commerce issued the Notice
for the Administration of Foreign
Investment (hereinafter referred to as
‘Notice’) in March 2011.
According to the Notice, some of the
administrative examination and approval
procedures are cancelled. For example,
the establishment of branches that are not
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subject to special requirements within the
Chinese territory and the list of equipment
to be imported as the capital contribution
do not need the examination and approval
from
the
competent
commerce
departments any longer, the FIEs can
directly finish the procedure with other
competent departments.
Moreover, some of the examination and
approval procedures are delegated to
lower level of authorities. For instance, the
confirmation of the encouraged catalogue
of FIEs with total amount of investment
less than $ 300 million will be handled by
the provincial level of commerce
departments and the merger and
acquisition of less than $ 300 million by
foreign investors will also be examined
and approved by the provincial level of
commerce departments.
However, on the other hand, some
administrative examination and approval
procedures become stricter in accordance
with the Notice. The provincial commence
departments must perform their functions,
strictly examine and approve, supervise
through the cooperation with other lateral
authorities the foreign investments in the
field of finance leases, international
express service, advertising, auction,
venture capital, equity investment and
management relating to big capital inflows
industry and other sensitive industries, etc.
by
Housing
Construction
Departments
and
and
Urban
other
‘Opinions for Further Strengthening the
Municipal Household Waste Treatment’
(hereinafter referred to as ‘Opinions’)
were issued by the Ministry of Housing
and Urban-Rural Development of PRC
and other Departments and were further
approved by the State Council in April
2011.
In light of the Opinions, the municipal
household waste treatment will be strictly
supervised and the policy supports will be
improved nationally. For example, the
strict access system is established upon
the fund, technology, personnel and
performance of the municipal household
waste treatment enterprises and the
public bidding system is strengthened for
choosing the competent municipal
household
waste
treatment
concessionaires.
On the other hand, the preferential tax
incentives and priority in the supply of
municipal household waste treatment
facilities construction lands are the
encouragement measures accordingly.
In practice, the provincial governments
shall
report
their
respective
implementation situation of the Opinions
to the State Council before the end of
August 2011 in accordance with the
Opinions.
Municipal
Household
Waste Treatment
■ Approved Notice of the State
Council on Opinions for Further
Strengthening
the
Municipal
Household Waste Treatment Issued
In conclusion, the Opinions can be viewed
as the signal of the Chinese government
to actively achieve full waste hazard-free
treatment in the coming years (the target
is that the waste hazard-free treatment
rate of all cities achieves 80% by 2015)
and to attract diverse assets including
foreign capital to participate in the
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constructions of municipal household
waste treatment public facilities.
Wine Imports to
Mainland China
the
■ Co-operation Arrangements of
General Administration of Customs
on Customs Facilitation Measures
for Wine Export to the Mainland via
Hong Kong and Macao Special
Administrative Regions
General Administration of Customs
reached the ‘Co-operation Arrangements’
with Hong Kong and Macao Special
Administrative Regions respectively in
February and May 2011 on customs
facilitation measures for wine export to the
Mainland China. The Arrangements came
into force on the same day of signatures
by the relevant parties.
According
to
‘The
Co-operation
Arrangement on Customs Facilitation
Measures’, after registration with the
relevant authority of HK or Macao, the
competent wine traders can enjoy the
customs facilitation measures through cooperation arrangements and export wine
via HK or Macao to mainland China. The
clearance of the customs time frame can
be shortened to 3-7 days. If the wine
trader raises the application of the tax
assessment to the local Administration of
Customs 10 days before the import date,
the customs procedure can be completed
within one day.
It is recorded, in 2010 the value of wine
imported to Macao reached 1.4 billion
patacas, and the value of wine exported
from Macao stood 100 million patacas,
great increasing compared with 2009. The
implementation of ‘The Co-operation
Measures’ can strengthen the status of
HK and Macao as the Asia wine trading
and distribution centers.
Moreover,
with
the
Co-operation
Measures, It is easier and more
convenient for wine traders to export wine
to mainland market and expand their
business scale in China.
Labor Law
■ Draft of Tentative Measures for
Participation in Social Insurance
System by Foreigners Working in
China
Draft of ‘Tentative Measures for
Participation in Social Insurance System
by Foreigners Working in China’
(hereinafter referred to as ‘Draft’) has
been released for public feedback by the
Ministry of Human Resources and Social
Security in June 2011.
The measures in the Draft are formulated
in accordance with the Social Insurance
Law of PRC which shall come into force
st
on 1 July 2011 (hereinafter refer to ‘SIL’).
Under Article 97 SIL, foreigners working
within the territory of PRC shall participate
in social insurance schemes by reference
to this law.
The Draft can be regarded as an
implementation vehicle of SIL on
foreigners working in China. According to
the Draft, there are two types of
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foreigners: foreigners directly employed
by Chinese legal entities or foreigners
dispatched to work at the branch offices
or representative offices legally registered
in China; the types of insurance include
employees’ basic pension, medical,
employment injury, unemployment and
maternity insurance.
For the foreign employees working in
China, the advantages of application of
the Chinese society insurance schemes
(hereinafter referred to as ‘SI’) will be that
they can enjoy the social insurance
benefits entitled according to SIL and the
Draft. The balances in his/her individual
account may be inherited when he/she
dies, or be paid in a lump sum upon
written requests or be kept if he/she
leaves before reaching the statutory age
for receiving the retirement pension, etc.
However,
there
are
also
some
disadvantages for implementation of SIL
to foreigners working in China. For
example, compared to commercial
pension insurance, SI is less flexible since
there are pre-requisites of statutory
retirement age and minimum contribution
duration. Especially for those who could
not stay in China for more than 15 years,
the possibility for them to enjoy complete
pension benefits provided by the SI
system is very low. Besides, social
medical insurance also has its drawbacks
in terms of strict rules on eligible hospital,
scope of medicine and reimbursement
ratio.
Moreover, from the perspective of the
employer, the implementation of the SIL
and the Draft will probably mean a notable
increase of human resource costs.
Till the release of this Newsletter, how to
apply SI on foreigners working in China is
still not totally clear. On the one hand,
from a strict legal point of view, SIL shall
be strictly followed and, therefore, foreign
employees shall also participate in the
Chinese SI schemes without exception.
On the other hand some Chinese human
resource experts believe that the
government would still provide the
employers hiring foreign employees with
two options, i.e. optional Chinese SI or
commercial insurances.
According to the response of the Ministry
of Human Resources and Social Security
to the European Chamber in late June
2011, the voluntary/optional contribution
to SI, as mentioned above as the second
approach, is not likely possible. However
the government could consider providing
certain grace period for application of the
Chinese SI on foreigners and foreigners
possibly could be exempted from
contribution to certain schemes.
More detailed information will be shared
through our following Newsletter once the
State Council has reviewed and approved
the measures.
Intellectual
Law
Property
■ New Amended Measures for the
Administration of Import of Audio
and Video Recordings
The amended Measures for the
Administration of Import of Audio and
Video Recordings (hereinafter referred to
as ‘the Measures’) have been approved
by the General Administration of Press
and Publication and the General
Administration of Customs and shall come
into force on the date of issuance in April
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2011, and the previous Measures issued
in 2002 shall be abolished simultaneously.
According to the Measures, the business
of importing finished audio and video
recordings shall be operated by importers
of finished audio and video recordings
approved by the General Administration of
Press and Publication, and no entity or
individual without such approval shall
operate aforesaid mentioned business.
publishing audio and video recordings is
uniformly the General Administration of
Press and Publication.
Compared to the old measures, the new
amended Measures reflect the changes
and
reform of Chinese press and
publishing and the publications market.
No entity or individual may reproduce for
profits, wholesale, retail, rent or show any
audio or video recordings imported for
research or teaching reference or
imported for exhibition or display in
accordance with the Measures.
In light of the Measures, the publication of
imported audio and video recordings shall
meet the requirements of the approval
document issued by the General
Administration of Press and Publication,
the publisher shall not alter the program
name or add or delete any program
content without approval, and the
approved Chinese name of the program
shall be used. Where publishing imported
audio and video recordings through an
information network, the publisher must
indicate the aforesaid information on the
relevant program pages.
It is worth mentioning that the Measures
were amended along with the amendment
of Provisions on the Administration of the
Publications Market and Measures for the
Administration
on
Subscribers’
Subscription for Imported Publications in
order to be in line with the new
amendments of Regulations on the
Administration
of
Publication
and
Regulation on the Administration of Audio
and Video Products. For example, under
the new framework of the administration
of
the
publications
market,
the
administrative authority of importing and
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CONTACTS
In France
In China
Robert GUILLAUMOND
Alban RENAUD
[email protected]
[email protected]
Denis SANTY
Li Huini
[email protected]
[email protected]
OFFICES OF ADAMAS
We warmly welcome you to contact our offices in Beijing and Shanghai:
ADAMAS in Beijing
ADAMAS in Shanghai
Suite 2108, Zhongyu Plaza,
A6 North Gongti Road,
Chaoyang District,
Beijing, 100027
Tel: +86 10 8523 6858
Fax: +86 10 8523 6878
Suite 3301, United Plaza,
1468 West Nanjing Road,
Jing’an District,
Shanghai, 200040
Tel: +86 21 6289 6676
Fax: +86 21 6289 6672
Moreover, ADAMAS collaborates closely with lawfirms in Guangzhou, Chengdu, Wuhan and
Hong Kong.
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NEWSLETTER

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