China Laws and Regulations Update in October 2021

1. Notice on Rectifying Virtual Currency “Mining”

Promulgated by eleven departments including NDRC

Promulgation date: 24 September 2021

Document number: FGYX 2021 No.1283

Based on the general principles of “close monitoring, strict risk control, no increase in current amounts and appropriate handling of current projects”, the Notice requires strengthened regulation of the complete industry chain in upper and lower streams of virtual currency “mining”, no new virtual currency mining projects, quicker orderly withdrawal from current projects, improvement of the industry structure and help to achieve the aims to halt the rise of and neutralize carbon emissions. The Notice gives three tasks including comprehensive review and examination of virtual currency mining projects and strict bans on investing and developing new projects, which are divided into specific measures to review and examine current projects and strengthen dual energy consumption control of new virtual currency mining projects. The Notice clearly put virtual currency mining on the list of eliminated industries and strictly bans doing virtual currency mining in the name of a data center.

(Source: Website of NDRC)

https://www.ndrc.gov.cn/xxgk/zcfb/tz/202109/t20210924_1297474.html?code=&state=123

2. Notice on Further Preventing and Handling Speculation Risks in Sale and Purchasing of Virtual Currency

Promulgated by the People’s Bank of China, etc.

Promulgation date: 24 September 2021

The Notice notes that virtual currency issued by no authority, using encryption, distributed account or similar technology or in a digital form, such as bitcoins and ethereum, including USDT, which are said to be stable, has no legal status of legal currency and could not be money in circulation. The Notice clearly states virtual currency related activities of exchanging virtual currency, purchasing and selling virtual currency as the central counter party, acting as go-between for virtual currency dealings, issuing and raising coins and selling and buying virtual currency derivative products as well as online services of overseas virtual currency exchanges provided to people living in China are illegal financial activities and strictly banned. Accordingly, the Notice sets out three measures including “the daily work mechanism to coordinate different departments and link central and local authorities”.

(Source: Website of the People’s Bank of China)

http://www.pbc.gov.cn/tiaofasi/144941/3581332/4348658/index.html

3. Notice on Amending Definitions of First Trials of Civil Cases that Intermediate People’s Courts Have Jurisdiction Over

Promulgated by the Supreme People’s Court

Promulgation date: 24 September 2021

Implementation date: 1 October 2021

Document number: FF [2021] 27

Notice states intermediate people’s courts have jurisdiction over first trials in civil cases below.

  1. Intermediate courts have jurisdiction over cases where all or none of the parties to the case have a registered address within the provincial administrative region of the competent court and the subject matter is worth over RMB 500,000,000;
  2. Intermediate courts have jurisdiction over cases where one of the parties to the case has no registered address within the provincial administrative region of the competent court and the subject matter is worth over RMB 100,000,000;
  3. Military courts in war zones and directly affiliated military courts have jurisdiction over case where the subject matter is worth over RMB 100,000,000;
  4. Higher courts may decide at its own discretion or at the request of lower courts to authorize intermediate courts to hear cases that are of a new type, difficult or complicated, or helpful for wide application of law pursuant to Article 38 of Civil Proceeding Law.

The criteria for deciding jurisdiction based on the level of courts under this Notice do not apply in intellectual property or maritime cases or civil or business cases involving people from foreign countries, Hong Kong, Macao or Taiwan.

(Source: Website of SPC)

http://www.court.gov.cn/fabu-xiangqing-324151.html

4. Notice on Issuing Regulatory Evaluation of Commercial Banks Rules

Promulgated by CBRC

Promulgation date: 22 September 2021

Document number: YBJF[2021] 39

Rules sets out criteria for the regulatory evaluation of commercial banks, comprised of nine elements, i.e. capital adequacy (15%), assets quality (15%), corporate governance and management quality (20%), earnings (5%), liquidity risk (15%), market risk (10%), data governance (5%), IT risk (10%), and organizational difference (5%).

Rules sets out restrictions based on the evaluation results and a dynamic adjustment mechanism.

(Source: Website of CBRC)

http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=1008579&itemId=915&generaltype=0

5. Notice on Firmly Punishing People Who Offer Off-campus Academic Programs by Indirectly Violating Related Rules

Promulgated by the Ministry of Education

Promulgation date: 8 September 2021

Document number: JJGTH[2021]8

Notice make arrangements from five aspects, i.e. compliance requirements, variations, residence based jurisdiction and regulatory rule enforcement. Notice states that off-campus academic programs should comply with national regulations regarding entities, instructors, delivery time, delivery place, contents and delivery mode of the programs. Punishment should be legally given for acts of delivering academic programs that do not meet compliance requirements in cases of breach of instructor related provisions where instructors of academic programs do not have qualifications for teachers or incumbent middle or primary school teachers give paid lessons after school or cases of breach of delivery mode related provisions where offline organizations offer online academic programs by instant communication, online meeting or live streaming.

(Source:Website of MOE)

http://www.moe.gov.cn/srcsite/A29/202109/t20210908_560508.html

6. Notice on Maintaining a Fair Competition Market Order and Causing Online Hailed Cars to Comply with Laws and Rules

Promulgated by the Ministry of Transport

Document number: JYMD[2021]223

Promulgation date: 9 September 2021

Notice requires local transport authorities instruct online car hailing platform operators to comply with laws and rules by no longer connecting themselves with and clearing themselves of  cars and drivers that do not comply with laws and rules. We need action plans, definite objectives and specific measures to make progress in work to comply with online car hailing related laws and rules. From September 2021, the Ministry of Transport publishes the monthly compliance rate of online hailed cars. Notice notes local transport authorities should work with authorities concerned to strengthen inspections of randomly selected entities by randomly selected inspectors, legally impose severe punishment for dumping low-priced products, using big data to the disadvantage of existing customers, indirect fraud and other illegal activities, help to form a uniform, open and orderly competition market system and maintain a fair competition market order.

(Source: Website of MOT)

https://xxgk.mot.gov.cn/2020/jigou/ysfws/202109/t20210909_3618156.html

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