China Laws and Regulations Update in August 2021

1. Instructions on Support for High Quality Reform and Opening Up and Development of a Pioneer

Socialist Modernization Zone of Pudong New Area

Promulgated by the Central Committee of the Communist Party of China and the State Council

Promulgation date: 15 July 2021

According to Instructions, by 2050, Pudong will have become an important urban area with great appeal, creativity, competitive advantages and influence in the world, a world model of urban governance capacity and effects and a brilliant pearl of the modern socialist power.

Instructions puts forward seven momentous moves, including moves to make innovation engine
as powerful as possible, expand new areas of our own innovation, strengthen reform system
integration, activate new motivations for high quality development, deepen the high standard
opening up based on related institutions, gain new advantages in international cooperation and competition, increase the ability to allocate world resources, create and provide services for the
new development paradigm, increase modernization standards for urban governance, create a
new situation for urban construction of the people, improve the quality of supplies, improve the quality and capacity of domestic needs by relying on great advantages of the domestic market, 
keep in mind risk awareness and make development and safety plans as a whole.

(Source: Website of the State Council)

2. Rules on Administrative Punishment for Securities and Futures Related Offenses

Promulgated by the Securities Regulatory Commission

Promulgation date: 15 July 2021

Implementation date: 15 July 2021

Document number: SRC order 186

Punishment Rules consists of forty-one articles mainly about the following. First, case filing
procedures and the authority to enforce laws. Cases with clues of illegal activities that meet related criteria should be filed. For legal and safe administration of administrative punishment,
powers and measures to enforce laws are further clarified and specified, including measures to freeze, close, seize or seal up related assets, impose restrictions on going abroad or doing business, require persons involved provide related documents, etc. and circumstances and consequences of not cooperating in investigations. Second, investigation and evidence collection
rules. Criteria and requirements for investigation and collection of major types of evidence such
as objects, written materials, statements and electronic data. Third, the examination mechanism.
 The Securities Regulatory Commission set up the administrative punishment committee responsible for giving opinions and conduction legal review of cases transferred to the committee according to related rules. Subject to authorization by Administrative Punishment Law, the
administrative punishment decision should be made within one year from the date of filing the
case. In special cases the period may be extended for no more than six months each time the responsible person gives approval. Fourth, take into action “three rules” on administrative law
enforcement. Written and other forms of recordings of the whole process of law enforcement
should be made and archived.Audio and video recordings of the process of law enforcement are
allowed to avoid disputes. Legal review is required by law before the administrative punishment
decision is made. The administrative punishment decision is open subject to regulations of public
access to government information.Fifth, protection of rights of parties involved and supervision of law enforcement officers. Before the administrative punishment decision is made, a prior
notice of administrative punishment should be given to parties involved and their rights to make
statements and arguments, attend hearings and read case files should be protected.

(Source: Website of SRC)

3. Consumer Right Protection Regulation and Evaluation Rules for Banks and Insurers

Promulgated by China Banking Regulatory Commission

Promulgation date: 16 July 2021

Implementation date: 16 July 2021

Document number: YBJF [2021] 24

Rules consists of six chapters and thirty-five articles, including general principles, evaluation
factors and rankings, duties and operational procedures, evaluation results and application, organization and work requirements, supplementary provisions. Rules applies to banks and insurers legally incorporated in China and providing financial products or services to consumers,
including commercial banks and finance, trust, automotive finance, consumer finance and insurance companies. The evaluation contains six factors of consumer right protection “system
construction”, “mechanism and running”, “operations and services”, “education and publicity”, “dispute resolution” and “monitoring and examinations” and twenty-four related indices.

(Source: CBRC website)

4. Tax Inspection Case Handling Procedures (Amended)

Promulgated by State Administration of Taxation

Promulgation date: 19 July 2021

Implementation date: 11 August 2021

Document number: SAT Order 52

Regulations consists of six chapters (General Principles, Case Selection, Examination, Hearings,
Enforcement and Miscellaneous) and sixty-one articles, including the following amendments.

(1) To protect personal information of the opposite party to administrative cases, Article 9 sets out “personal information known in the course of tax inspections shall be kept in confidence legally”. We should take relevant provisions of Civil Code into action, prevent leakage of personal
information in the course of inspections and law enforcement and legalize and standardize
inspections and law enforcement.

(2) Recording the whole process of administrative law enforcement is required. The new Article 11 states “in tax inspection cases, the whole process of dealing with the case, including start, investigation and evidence collection, review, decision, service and enforcement of the case shall
be recorded in written, audio, visual and other forms”.

(3) Electronic data access procedures are specified. An addition to Article 23 states “inspectors
shall keep live written records of collecting and accessing electronic data,indicating the source of
such data, the reason, purpose or person for which such data will be used, the time, place, means, process of accessing such data, the place and seal of original storage media, etc.”

(4) Provisions relating to protection of rights of information and statement and defense are

(5) Specifying evidence in punishment decision forms is required.

(6) New provisions relating to tax administration punishment decision publication and withdrawal procedures are included.

(7) Time limits on dealing with tax inspection cases are specified. To take relevant provisions of 
Administrative Punishment Law into action, Article 47 sets out “the inspection authority shall
decide the administrative action or punishment or no violation of tax law within a 90-day period
from the date of filing the case, which may be extended for no more than 90 days subiect to
approval of the head of the tax authority in complicated cases where such extension is necessary”.

(8) New provisions relating to suspension or delay of payment of fines are included. The new Article 51 states “if a person has financial problems and need to pay fines at a later time or by
installments, the person may apply to the inspection authority and pay fines at a later time or by installments after the application is approved by the head of the tax authority”.

(9) Advance tax enforcement notification procedures are specified.

The work mechanism for updating action and punishment decisions.

(Source: SAT website)

5. Pig Slaughter Management Rules

Promulgated by State Council

Promulgation date: 22 July 2021

Implementation date: 1 August 2021

Document number: SC Order 742

The amended Rules improves pig slaughter related provisions in three respects.

1.Pig slaughter process control. Rules provides that designated pig slaughter factories (houses) should establish an incoming inspection and registration system, slaughter pigs in accordance
with national operational procedures, technical requirements and quality management standards for pig slaughter and in strict compliance with sterilization technical specifications and conduct meat quality inspection by following meat quality inspection procedures for pig slaughter.

2.Animal epidemic prevention and control. Rules provides that in case of animal epidemics, designated pig slaughter factories (houses) should conduct tests, screening and reporting for animal epidemics and take examinations and keep records of transport conditions.

3.Legal responsibility. Rules imposes more severe punishment for illegal activities and connects administrative punishment and pursuit of legal responsibility. Business and individual offenders may face punishment of business suspension and rectification, confiscation of illegal profits,fines and cancellation of designated pig slaughter house certificate. Public security authorities may
detain persons involved according to Food Safety Regulations. The legal representative (responsible person) of a designated pig slaughter factory (house) facing a cancellation of the designated pig slaughter house certificate as punishment cannot apply for the certificate or do pig slaughter management jobs within five years. Persons who are or were in prison for having committed a food safety crime will suffer a lifelong ban on doing pig slaughter management jobs.

(Source: SC website)

6. Instructions on Protecting Employment Rights of Persons in Emerging Jobs

Promulgated by Ministry of Human Resources and Social Security

Promulgation date: 22 July 2021

Document number: RSBF [2021] 56

Instructions expressly requires businesses maintain legal employment with their staff, actively
perform employer obligations and protect rights of staff in emerging jobs who are qualified for employment or not fully qualified for employment but under labor management of the business. 
In case of employment by cooperation such as labor dispatch or outsourcing, platform businesses and their partners should legally perform their own duties of employment.
Instructions focuses on critical issues of protection of rights of employees in emerging jobs and suggests improvement of fair employment, compensation, holiday, safety and social insurance policies, protection of persons suffering occupational damage and improvement of the employee
claiming mechanism and approaches to headaches and difficult problems in labor protection and
public services for persons in emerging jobs, such as provision of employment services, social insurance, professional training and work and life support services.
 Instructions requires local departments concerned promulgate specific rules, publicize policies, 
work harder to mediate disputes, take tougher regulatory actions and effectively protect rights
of persons in emerging jobs.

(Source: MHRSS website)

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