China Laws and Regulations Update in October 2019

1.Encryption Law of the People’s Republic of China

Promulgated by the Standing Committee of the National People’s Congress

Promulgation date: 26 October 2019

Implementation date: 1 January 2020                            

The Encryption Law states that main rules on commercial encryption including standard, inspection and certification, market access, use requirement, import and export, e-administration and e-certification service and in-process and post regulation rules on commercial encryption. (Source: Website of the National People’s Congress)

http://www.npc.gov.cn/npc/c238/201910/a48b204760ed4d3d856d4440fa723c64.shtml

2.Rules on Improvement of Business Conditions

Promulgated by the State Council

Document Number: No.722 SC Order

Promulgation date: 23 October 2019

The Rules defines business conditions as “factors and conditions in the system of economic activities of entities in markets” “to continue the opening up, boost foreign investment and treat all kinds of entities including domestic and foreign funded businesses equally”. The Rules is about reducing time needed to start up a business, guaranteeing all entities have the equal right to enter the markets, maintaining fair competition and market order, carrying out tax and cost reduction policies, setting business related payment standards, reducing difficulty in and the cost of raising funds, simplifying business cancellation process, etc. (Source: Website of the State Council)

http://www.gov.cn/zhengce/content/2019-10/23/content_5443963.htm

3.Implementation Rules on the Food Safety Law of the People’s Republic of China

Promulgated by the State Council

Document Number: No.721 SC Order

Promulgation date: 31 October 2019

Implementation date: 1 December 2019

The Rules consisting of ten chapters and eighty-six articles further clarifies legal responsibility for food safety related offenses, imposes fines on legal representatives, heads and directly responsible supervisors and people of companies involved in deliberately committed offenses and other circumstances, and imposes strict legal liability for new obligations. (Source: Website of the State Council)

http://www.gov.cn/zhengce/content/2019-10/31/content_5447142.htm

4.Notice on Facilitating Investment in Cross-Border Trade

Promulgated by the State Administration of Foreign Exchange

Document number: H.F.[2019] No.28

Promulgation date: 25 October 2019

Implementation date: 25 October 2019

The Notice lifts the restriction on foreign funded non-investment businesses making equity investment in the form of capital in China, stating that without affecting the right of foreign funded investment businesses (including investment, startup investment and equity investment businesses) to legally make equity investment in the form of capital in China, foreign funded non-investment businesses are allowed to make equity investment in the form of capital in China on the condition that the investment does not violate the existing special measures to regulate the access of foreign investment (negative list) and is made in real and non-violating projects. (Source: Website of the State Administration of Foreign Exchange)

http://www.safe.gov.cn/safe/2019/1025/14469.html

5.Regulations of Trademark Registration Applications

Promulgated by the State Administration for Market Regulation

Document number: No.17 SAMR Order

Promulgation date: 16 October 2019

Implementation date: 1 December 2019                            

The Regulations states that trademark registration applications filed in bad faith for a purpose other than uses of the trademarks will be rejected and not be announced. Any unit or person can request the trademark registration authority to cancel registered trademarks that are not in use for consecutive three years without good reason. A person who files a trademark registration application in bad faith will be given a warning, fine or other administrative penalty as the case may be. Such person may need to pay a fine of three times its illegal profits and no more than RMB 30,000, or if no illegal profits are obtained, less than RMB 10,000. (Source: Website of the State Administration for Market Regulation)

http://gkml.samr.gov.cn/nsjg/fgs/201910/t20191016_307410.html

6.Opinions on Several Issues Connected with Criminal Cases Involving Illegal Loans

Promulgated by the Supreme People’s Court, Supreme People’s Procuratorate, Ministry of Public Security, Ministry of Justice

Promulgation date: 21 October 2019

Implementation date: 21 October 2019                            

The Opinions states that a loan with the actual annual interest rate of more than 36% is an illegal loan under Article One of the Opinions and the amount of an illegal loan should be calculated on the basis of the actual amount of the principal. Interest on the illegal loan in such forms as referral, consulting or management fee, interest on delayed payment or breach penalty, which is paid by advance deduction from the principal or other means should be included in the calculation of the actual annual interest rate. (Source: Website of the Supreme People’s Court)

http://www.court.gov.cn/fabu-xiangqing-192201.html

 

Lawyer Contacts

You Yunting

86-21-52134918  

youyunting@debund.com

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