China Laws and Regulations Update in February 2023

1. Instructions on Several Issues Connected with Enforcement Supervision Application Cases

Promulgated by Supreme People’s Court

Promulgation date: 31 January 2023

Document number: FF[2023]4

The Instructions regulates and gives guidance for common issues connected with enforcement supervision application cases. It regulates the filing and processing of these cases and gives guidance and includes requirements for appropriate ways in which parties involved can apply for enforcement supervision to the enforcement court and the court at the next level, eliminates ambiguities in existing enforcement rules by explicitly stating that in cases that should be resolved by arbitration or suing for substantive issues, parties involved and interested persons should follow the procedures of seeking remedies for substantive issues and work to enforce law and protect legal rights of parties involved more efficiently by regulating multiple and repeated enforcement supervision applications. It also sets out the period of application for enforcement supervision, explicitly stating that if the applicant refuses to accept the enforcement reexamination decision or applies to the court for enforcement supervision after expiration of the period for filing an opposition to or a request for reexamining the enforcement, the applicant should do so within the prescribed period of time. (Source: SPC website)

2. Instructions on Legal Services for Active and Steady Promotion of Carbon Dioxide Peaking and Carbon Neutrality

Promulgated by Supreme People’s Court

Promulgation date: 17 February 2023

Document number: FF[2022]35

The Instructions closely related to the “carbon peaking and carbon neutrality” goals provides a benchmark for main tasks under the Instructions on Fully, Accurately and Comprehensively Applying the New Development Philosophy by Accomplishing the Work to Peak Carbon Dioxide Emissions and Neutralize Carbon Dioxide by following the principles of exercising nationwide planning, prioritizing conservation, leveraging the strengths of the government and the market, coordinating efforts on the domestic and international fronts and guarding against risk to bring into full play the functions of trials and provide strong legal services for actively and steadily promoting carbon dioxide peaking and carbon neutrality. The Instructions consists of six parts and 24 articles, including Part I about principles and requirements for the work to provide legal services for carbon peaking and carbon neutrality, Part VI about further deepening the reform and innovation of environment law administration and Part II through Part V mainly about instructions on specific matters connected with the handling of carbon related cases by Chinese courts. (Source: SPC website)

3. Construction Project Inspection Rules

Promulgated by Ministry of Housing and Urban-Rural Development

Promulgation date: 19 January 2023

Implementation date: 1 March 2023

Document number: MOHURD Order No.57

The Rules provides that inspection agencies should have the license for inspecting construction projects and perform the activities of inspecting construction projects within the license specified scope. The inspection agency license includes comprehensive and special licenses. The term of the license is five years. In the Rules, the inspection report may not be valid until being signed by inspector, examiner, legal representative or their authorized person of the inspection agency and bearing the special seal for inspection. The inspection report issued by an inspection agency appointed by a person not related to the construction unit cannot be used as evidence of the quality of the accepted construction project. It further states that if activities of inspecting construction projects are performed without the related license, after expiration of the license or outside the license specified scope, any inspection report issued will be invalid and the residential house construction authority of the local government above the county level will impose a fine between RMB 50,000 and RMB 100,000 or if they cause any damage, RMB 100,000 and RMB 200,000 or if it involves a crime, a criminal penalty will be imposed. (Source: MOHURD website)

4. Chinese Time-honored Brand Model Establishment Rules

Promulgated by Ministry of Commerce, Ministry of Culture and Tourism, State Administration of Market Regulation, National Cultural Heritage Administration and National Intellectual Property Administration

Promulgation date: 1 February 2023

Implementation date: 3 March 2023

Document number: SLTGF[2023]6

The Rules stresses historical and traditional qualities, the leading role and exemplary effect, protection, promotion, regulation and management of time-honored brands, focuses on bringing into full play the leading role and exemplary effect of time-honored brands in consumption promotion, industry upgrading, cultural development, national confidence, etc. and includes explicit provisions and requirements relating to general rules, qualifications, review of applications, dynamic management, etc. for establishment of a model Chinese time-honored brand. The Rules requires establishment of a dynamic management mechanism where brands may be added to and removed from the time-honored brand list to continue improving the list, help Chinese time-honored brands follow the market mechanism, pursue innovation and develop with integrity and lead and help more market entities actualize high quality development, vigorously boost up confidence in development, speed up brand cultivation, form a strong domestic market and meet the people’s demand for better life. (Source: MOC Website)

5. Social Insurance Fund Supervision and Reporting Rules

Promulgated by MOHRSS

Promulgation date: 1 February 2023

Implementation date: 1 May 2023

Document number: MOHRSS Order No.49

Social insurance fund supervision and reporting under the Rules means acts of any organization or individual telling the administration for human resources and social security about alleged social insurance fund fraud, swindle or embezzlement by an organization, unit or individual. It further provides that any organization or individual can report alleged falsification of social insurance contribution qualifications with false documents, etc., inappropriate late payment of social insurance premiums, etc. by an insured organization, individual or agency according to the Rules. It states that reporters can file a report in a real name or anonymously. Reporting in a real name is encouraged. Reporter’s legal rights are legally protected. No unit or individual may stop, restrain or revenge on reporters with any excuse. It also mentions that if a reporter will be awarded for his/her report that is found as true and results in avoidance or reduction of a great loss of the social insurance fund. (Source: MOHRSS website)

6. Financial Assets Risk Classification Rules for Commercial Banks

Promulgated by China Banking and Insurance Regulatory Commission and the People’s Bank of China

Promulgation date: 11 February 2023

Implementation date: 1 July 2023

Document number: CBIRC and PBC Order [2023] No.1

The Rules consists of six chapters and 48 articles and requires commercial banks follow the principles of authenticity, timeliness, prudence and independence and classify financial assets with credit risks on and out of financial statements into different risk levels. Compared with the existing Loan Risk Classification Guide, the Rules broadens the range of assets that should be classified into different risk levels and includes a new definition of risk classification, stresses classification principles with the focus on the debtor ability to perform the agreement, and further clarifies risk classification criteria and requirements. In addition, the Rules requires that commercial banks should establish a system for improvement of risk classification management.

(Source: CBIRC website)

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