China Laws and Regulations Update in May 2021

1. Minutes of Meeting on What Courts in China Should Do to Fully Implement Civil Code

Promulgated by the Supreme People’s Court

Document number: L.I.[2021]94

Meeting Minutes clarifies important issues concerning the application of law and work mechanism that should be addressed now to take Civil Code into full action. It is crucial for appropriate administration of Civil Code, creation of uniform law application rules, equal protection of legal rights and interests of all sides and services for excellent social and economic development. Courts of all levels should fully and accurately understand the essence and fundamental parts of Meeting Minutes.

The supreme court noted that minutes were not legal interpretation and should not be cited in the basis of an official decision. After the publication of Meeting Minutes, in cases that have not been decided in the first or second trial, court can give reasons for the application of law in the “court opinions” section of its judgement according to applicable provisions of Meeting Minutes.

Meeting Minutes contains:

  1. Rules on application of chapters of general principles and contracts in Civil Code
  2. Rules on application of new and old laws relating to Civil Code and relevant legal interpretations
  3. Guides to application of Civil Code in trials and researches and studies of application of Civil Code.

(Source: Supreme People’s Court)

2. Decision of the Supreme People’s Court to Amend the Regulations on Jurisdiction of Shanghai Financial Court

Promulgated by the Supreme People’s Court

Promulgation date: 22 April 2021

Implementation date: 22 April 2021

Document number: LI[2021]9

Decision contains the following amendments.

  1. After amendment, Article One:

“Shanghai Financial Court has authority over first trials of civil and commercial cases in finance below that a court at intermediate level should be responsible for within the area under the jurisdiction of Shanghai.

(1) securities, future, business trust, insurance, bill, letter of credit, independent letter of guarantee, factor, borrowing contract, bank card, finance lease contract, financial management contract, savings contract, pawn, bank payment contract and other commercial and civil cases of finance;

(2) civil and commercial cases in finance arising from assets management, assets-based securities, private fund, foreign exchange, sale and appropriate management of financial products, credit or payment services and other financial services approved by relevant authority;

(3) company related cases involving financial institutions;

(4) bankruptcy cases where financial institutions owe debts;

(5) Arbitration and legal inspection in civil and commercial cases in finance;

(6) requests for recognition and enforcement of decisions and awards by courts in Hong Kong, Macao and Taiwan and foreign countries in civil and commercial cases.

  1. Article Two replaces Article Six.

Shanghai Financial Court has authority over first trials of administrative cases in finance brought against administrative acts of financial regulatory authorities and other organizations delegated by law, regulation or rule performing their financial regulatory duties, which a court at intermediate level should be responsible for within the area under the jurisdiction of Shanghai.

  1. A new clause is added to Article Two.

“Shanghai Financial Court has authority over financial cases below.

(1) Actions brought to Shanghai Financial Court by investors at home for securities issuance, dealings or sale of futures outside the People’s Republic of China that damage their legal rights;

(2) Actions brought to Shanghai Financial Court by individuals or organizations at home for financial products or services sold by financial institutions outside the People’s Republic of China that damage their legal rights.

For other amendments, see the original text of the document.

(Source: Supreme People’s Court)

3. Notice of Publication of Top Ten Intellectual Property Cases and Fifty Classic Intellectual Property Cases Decided by Chinese Courts in 2020

Promulgated by the Supreme People’s Court

Promulgation date: 16 April 2021

To take full advantage of classic cases in teaching and guiding people, the supreme court selected ten intellectual property cases and fifty classic intellectual property cases decided by Chinese courts in 2020 from cases recommended by high courts and cases heard by the supreme court in 2020. The list of selected and classic cases will be published and provided to courts at all levels to help their work on hearing and deciding intellectual property cases.

Our lawyers Yuan Yang and Si Weijiang advised on the intellectual property case ranked the first on the list, which is the “administrative case of announcement of the invalidity of patent rights in an invention between Apple Computer Trading (Shanghai) Ltd. and the National Intellectual Property Office and Shanghai Zhizhen Intelligence and Internet Technology Co., Ltd. [(2017)SPCART34 Administrative Verdict by the Supreme People’s Court]”. In this case, our claims were allowed by the supreme court after a seven-year battle.

(Source: China Court)

4. Internet-Based Live Stream Marketing Rules (Taken into Action on an Experimental Basis)

Promulgated by the Cyberspace Administration of China

Promulgation date: 23 April 2021

Implementation date: 25 May 2021

Rules requires that live stream marketing platforms establish full mechanisms and measures for account and live stream marketing service registration and cancellation, information security management, code of conduct in marketing, juvenile, consumer rights and personal data protection and cyber and information security management. Rules classifies live stream marketing event advertisers into live stream facility operators and live streamers, sets out the age limit and a red line for prohibited actions and detailed requirements about advertising campaigns of live stream facility operators and live streamers, online and offline live stream facilities, inspection of details of products and services, use of virtual images, business cooperation with live stream marketing service providers. It further states that live stream marketing platforms should actively help customers protect their legal rights and give necessary evidence and other support. (Source: Website of the Cyberspace Administration of China)

5. Regulatory Rules of Financial Institutions Against Money Laundering and Terrorist Financing

Promulgated by the People’s Bank of China

Promulgation date: 19 April 2021

Implementation date: 1 August 2021                        

Rules mainly contains the following amendments, 1. regulatory principles and job requirements that give priority to risk control; 2. new requirements for financial institutions about internal control and risk control against money laundering; 3. improvements to measures and approaches against money laundering; and 4. people to whom regulatory rules against money laundering apply. To improve regulatory measures against money laundering, Rules removes interrogation measures from and adds the Letter of Information about Regulatory Rules Against Money Laundering to inform financial institutions of issues and potential risks in a timely manner. Meanwhile, it improves onsite risk evaluation measures and circumstances where regulatory visits and interviews are applicable and includes new administration requirements for financial institutions with branches or affiliates controlled by share holdings in foreign countries. (Source: Website of the Xinhua News)

6. Rules on Import and Export Food Safety

Promulgated by the General Administration of Customs

Promulgation date: 13 April 2021

Implementation date: 1 January 2022

Document number: GAC 249  

Rules provides that imported food to which national food safety standards are not applicable should meet applicable temporary standards promulgated by the health department of the State Council. To use new raw materials in food, the health permit for new raw materials for food granted by the health department of the State Council is required according to Article 37 of the Food Safety Law. Rules clearly states that the Customs makes assessments of imported food according to import and export inspection related laws and regulations. In any of six events set out in Rules, the General Administration of Customs can commerce assessment and inspection of a foreign country (or area). (Source: Website of the General Administration of Customs)

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