China Laws and Regulations Update in September 2022

1. Law Against Telecommunication Fraud

Promulgated by the Standing Committee of National People’s Congress

Promulgation date: 2 September 2022

Implementation date: 1 December 2022

Document number: 119 President Order

The Law Against Telecommunication Fraud consists of seven chapters and fifty articles, including general principles, telecommunication, financial and internet governance, comprehensive measures, legal responsibilities, supplementary articles, etc. in order to give powerful legal support for fighting telecommunication fraud by adhering to the people centered philosophy, balancing development and safety, preventing and governing telecommunication fraud in all parts of the chain and working hard with accuracy. The Law further strengthens punishment for telecommunication fraud by including specialized provisions relating to administrative punishment and further clarifying the offender’s civil responsibilities and records on the credit report.


China Laws and Regulations Update in August 2022

1. Decision to Abolish and Change a Number of Penalties

Promulgated by State Council

Promulgation date: 12 August 2022

Document number: SI[2022]15

The content of the Decision is comprised of three main parts.

First, abolition and modification of 53 penalties, including 29 ones abolished, 1 by the Ministry of Public Security, 12 by the Ministry of Transportation and 16 by the State Administration for Market Regulation, and 24 ones modified, 19 by the Ministry of Transportation and 5 by the State Administration for Market Regulation. The Decision sets forth names of, bases for creation of, decisions to deal with and regulatory measures that substitute such penalties.


How to Send Data in Chinese Concept Share Audit Papers Abroad?

(By You Yunting) China and the US recently signed the Audit Supervision Cooperation Agreement, allowing supervisors and inspectors of the Public Company Accounting Oversight Board (PCAOB) to review audit materials of Chinese companies listed in the US in Hong Kong, including complete audit papers containing all information. According to media reports, Alibaba, JD and Yum China are the first businesses to be audited.[1] Audit papers contain large amounts of data and personal information of domestic users (collectively “data”). I would like to discuss whether the audit paper review by the US parties is outbound data transfer and what procedures should be followed to transfer the data abroad according to Chinese laws.


What is Disney’s Greatest Concern After Expiration of Copyright in Mickey Mouse

(By You Yunting) The 94-year-old Mickey Mouse will reach the end of its copyright protection term in the US, Disney’s headquarters. Actually, its copyright protection terms in other countries almost all expired some time ago. Being well acquainted with Mickey Mouse IP, Disney has maximized profits by running its business skillfully and continuing making innovations. However, it has weaknesses as well. This article discusses the most destructive practices by its rivals to the commercial value of Mickey Mouse, potential damage to Mickey Mouse’s commercial value by making it a horror or pornographic movie, and its corresponding solutions.


Why Huawei Trademark Has More Worth than MI Trademark in Trademark Infringement Cases?

(By You Yunting andGao Tianyi) In a recently decided trademark infringement case brought by Huawei Technology Ltd. (“Huawei”) against Shenzhen Shangpai Technology Ltd. (“Shangpai”), the court awarded Huawei all punitive damages based on its claims and ordered Shangpai to pay Huawei RMB 5 million. In this case the court found 80% contribution rate of the trademark “Huawei”, which was much higher than the 30% contribution rate of the trademark “mi” in a precedent similar case. So let’s discuss whether the contribution rate of Huawei trademark decided by the court was rational and how punitive damages in the trademark infringement case were calculated.


China Laws and Regulations Update in June 2022

1. Opinions on Improvement of Block Chain Applications in the Judicial Fields

Promulgated by Supreme People’s Court

Promulgation date: 25 May 2022

Document number: LI[2022]16

Opinions consists of seven parts and 32 articles, clarifying overall requirements for blockchain application in the judicial field and requirements for the establishment of the blockchain platforms of the poeple’s courts, charting courses for four typical application scenarios where blockchain technology facilitates the enhancement of judicial credibility and etc., and specifying measures to guarantee the blockchain application. The Opinions mainly hasthe following features. First, it proposes establishing a judicial blockchain alliance featuring interconnectivity and mutual sharing. Second, it clarifies requirements for the establishment of the blockchain platforms of the people’s courts. Third, it proposes the application of data tamper-proof blockchain technology to enhance judicial credibility. Fourth, it proposes using blockchain to improve business procedures and judicial efficiency. Fifth, it proposes interconnecting blockchains to enhance judicial coordination. Sixth, it proposes using mutual trust of the blockchain alliance for economic and social governance.


Are There Any Differences between WPS and Apple in Scanning Users’ Cloud Data?

(By You Yunting and Wang Ting) According to media reports[1] , the office software WPS recently got involved in a privacy case where one of its users alleged that WPS blocked his local and cloud files without any reasons and caused him unable to use them with the system showing that “they may contain something prohibited and are no longer accessible”. WPS replied that actually, it is the shared link of certain online files that is suspected of violating rules and WPS correspondingly invalidated the access to such link pursuant to laws. However, WPS was still criticized for its scanning users’ data.


An Overview of Key Points in the Measures for Data Outbound Transfer Security Assessment

(By Wang Hongliang) Just after the latest publication of my article about the compliance concerning outbound transfer of personal information, in which I referred to the Measures for Data Outbound Transfer Security Assessment (Exposure), the exposure version became official regulations on July 7th.

Accordingly, safety evaluation, the strictest way to transfer data abroad became the first one regulated in law. The Measures for Data Outbound Transfer Security Assessment is generally in the context of previous exposure versions. I would like to give a brief explanation of key points in the Rules.


Outbound Personal Information Transfer Is Better Regulated – A Brief Analysis of Regulations on Standard Contract for Cross-Border Transfer of Personal Information (Exposure) and Security Certification Procedures for Cross-Border Handling Activities of Personal Information

(By Wang Hongliang) Many businesses are perplexed by the practical problem about outbound personal information transfer compliance, especially for foreign-inveested businesses that need to provide personal information abroad in many scenarios, for example when they have to provide personal information to their headquarters or affiliates.

Article 38[1] of the Personal Information Protection Law provides that in addition to other premises, security assessment, personal information protection certification and standard contract are approaches to outbound personal information transfer compliance. According to Article 4[2] of the Measures for Data Outbound Transfer Security Assessment (Exposure), the security assessment mainly applies to the situations when personal information is collected or generated by critical information infrastructure operators, personal information handlers processing personal information of one million people or more transfer personal information abroad or personal information of over 100 thousand people or sensitive personal information of over 10 thousand people is cumulatively transferred abroad.


By Adding Safe Harbor in Anti-Monopoly Law, Do Small and Medium Sized Businesses Regain the Right to Set Resale Prices?

(By You YuntingCan brand holders cap wholesale and retail prices of their products? Many people believe brand holders have the discretion to set prices. However, the Anti-Monopoly Law 2007 imposes such strict restrictions that almost ban this practice, causing controversies. The safe harbor clauses added to the new Anti-Monopoly Law adopted by the Standing Committee of the National Congress conditionally allows small and medium sized businesses with small market shares to cap resale prices. Now let’s look at where the safe harbor comes from.


China Laws and Regulations Update in May 2022

1. Provisions (II) on the Standards for Filing Criminal Cases under the Jurisdiction of the Public Security Organs for Investigation and Prosecution (Amended)

Promulgated by Supreme People’s Procuratorate and Ministry of Public Security

Promulgation date: 29 April 2022

Implementation date: 15 May 2022

The standards for filing criminal cases for investigation and prosecution of 21 kinds of cases are improved according to amended laws and legal interpretations. The standards for filing criminal cases for investigation and prosecution of 9 kinds of securities and futures crimes are changed according to Criminal Law Amendment (XI) and the amendments to Securities Law in order to fight crimes relating to securities issuance fraud, breach of disclosure rules, concealment of important information, etc. and protect investors’ legitimate rights and interests. In addition, the standards for filing criminal cases for investigation and prosecution of 12 kinds of crimes, including false registered capital crimes are modified according to the amendments to Criminal Law, Company Law and other laws and legal interpretations.


China Laws and Regulations Update in April 2022

1. Interpretation of Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People’s Republic of China by the Supreme People’s Court

Promulgated by Supreme People’s Court

Promulgation date: 17 March 2022

Implementation date: 20 March 2022

Document number: L.I.[2022] 9

The Interpretation consists of 29 articles mainly to further clarify Article 2 of the Anti-Unfair Competition Law, counterfeits and confusion, false publicity, unfair competition on the internet, etc. under the amended Anti-Unfair Competition Law.


Is Andy Liu Responsible for Audi’s Plagiarism in its Advert?

(By You YuntingThe other day Audi made an allegedly plagiarized advert at Grain Buds, one of the traditional Chinese solar terms, attracting public interest. I felt bad about this incident because the advert in dispute was shot with my favorite star Andy Liu. Today I would like to discuss whether Andy Liu is also responsible for the infringement if “Mr. Grain Buds from Peking University” takes an action.

First, let’s look at the case facts. May 21st is Grain Buds, one of the traditional Chinese solar terms. On that day Audi published the advert Live a Life Like Grain Buds endorsed by Andy Liu on several platforms, including douyin and weibo, which soon gained much popularity on the internet. “Mr. Grain Buds from Peking University”, a douyin blogger showed proof in a video that Audi made the advert by plagiarizing his writings. Audi apologized in public and removed the advert completely from the internet and Andy Liu also removed the advert video from his douyin account.


China Laws and Regulations Update in March 2022

1. Interpretation of Several Issues Connected with Application of General Principles of Civil Code

Promulgated by Supreme People’s Court

Promulgation date: 25 February 2022

Implementation date: 1 March 2022

Document number: L.I.[2022] 6

The Legal Interpretation of the general principles part mainly addresses three issues. First, the transition between Civil Code and old laws. After Civil Code was taken into action, the Provisions of Civil Law, the General Principles of Civil Law, the Contract Law, etc. are abolished with relevant legal interpretations such as the Instructions on the Provisions of Civil Law, the Legal Interpretation I of Contract Law, the Legal Interpretation II of Contract Law being abolished by the Supreme People’s Court. Many clauses in these legal interpretations are consistent with Civil Code and helpful for the work of judicial authorities and need to be retained and integrated to avoid law application problems during the transition, adversely affecting the implementation of Civil Code. Second, a collection of experiences and insights in legal practices acquired by courts over a long period of time. Civil Code was made by codification with many clauses sourced from its counterparts. Chinese courts have abundant experience in the application of these clauses to civil cases. These clauses need to be incorporated into it to ensure all cases are decided fairly. Third, in response to law application issues that call for clarification after the Provisions of Civil Law was taken into action. The majority of the General Principles of Civil Code come from the General Principles of Civil Law, which was in force for over four years, in which Chinese courts accumulated rich practical experience and put forward some law application issues to be addressed.