Nonetheless, recent legislation signifies that Common Prosperity and digital transformation shall continue to dominate forthcoming regulations in 2023 and beyond. For companies, it is crucial to keep abreast of new policies and changes, as provisions can significantly impact business operations and strategies.
Common prosperity (共同富裕 gòngtóng fùyù)

‘Common Prosperity’ is not a 20th-century political term. Its literal translation is to get rich (富裕 fùyù) altogether (共同 gòngtóng) and first appeared in 1953 in People’s Daily newspaper. The term is attributed to the holding of resources for the common and reflects the fundamental collective society in China. Most recently, it resurfaced in President Xi Jinping’s inauguration speech as Party Secretary in 2017, and more predominantly in the Prospect Vision of the year 2035 in the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China (October 2020). The principle refers to prosperity for all people. Namely, socioeconomic development and wealth shall not be obtained by select individuals or groups, rather it is collectively acquired and benefited by the people.

In practice, Common Prosperity underlines socioeconomic reforms to alleviate poverty in the poorer regions and reduce socioeconomic polarisation between the urban and rural areas.

Common Prosperity in legislation

Legislation fostering sustainable economic growth and high-quality development are key to achieving Common Prosperity. For example, the revised Anti-Monopoly Law effective from 1 August 2022 elevates legal liabilities to prevent larger companies from monopolising the market and eliminating smaller competitors. Equally, the revisions prioritise anti-trust policies to ensure sustained market development and fairer market practices.

More recently, the revised Unfair Competition Law, draft for comment (‘Revision’), issued on 22 November, strengthens legal protection for small and medium companies (‘SMEs’) in China. Specifically, Article 13 of the Revision targets companies with comparatively dominant positions and lists forbidden practices that disrupt fair trade and fair competition. Violating companies can face fines of up to 1 million RMB.

Moving into 2023, curbing monopolies, especially in the big tech companies and optimising a fairer market for SMEs shall continue. Common Prosperity promotion within the material, ecological and cultural in a context of high-quality development, as outlined by President Xi Jinping in the Central Committee for Financial and Economic Affairs (2021) will underline national and local policies.

Digital transformation of SME

SMEs are a driving force in China. Accounting for 50% of taxes, 60% of GDP and 70% of technology innovation, SMEs significantly contribute to economic growth. Industrial digital transformation for SMEs can be financially and practically challenging to implement. However, the digital transformation of SMEs is key to long-term development, reducing reliance on the external environment, and accelerating the overall digital economy.

The Circular of the General Office of the Ministry of Industry and Information Technology on Issuing the Guide to the Digital Transformation of Small and Medium-sized Enterprises (‘Guide’), effective from 3 November 2022, calls local governments to advance digital development in SMEs. The Guide reflects Common Prosperity principles in fostering high-quality and sustained development for smaller companies. And provisions focus on lowering investment barriers for SMEs to upgrade software and integrate into a digital ecosystem.

Specific provisions promote the following:

• providing small, fast, lightweight, and precise products and solutions;
• researching, developing, and promoting low-code products and services;
• developing subscription-based software services;
• helping SMEs to create, deploy, use, and adjust digital applications themselves, and
• improving SMEs’ secondary development capability and demand response capability.

Overall, digitalisation plays a vital role in China’s socioeconomic development. In 2023, we predict that local supportive policies should be issued by local governments to expedite internet applications for SMEs, upgrade company infrastructure, and make business operations more efficient and cost-effective. In addition, forthcoming cyber and data security regulations and rules are anticipated across sectors. Cyber security will become increasingly prevalent, as digitalisation accelerates in the business world.

What it means for foreign investment in China

For foreign companies, understanding Common Prosperity and its practical implications are essential.

Aligning business strategies with Chinese politics and policies determines a company’s success and profits significantly.

The days of leveraging cheap labour in China or a western brand story are long gone. Sustainable investments that fulfills Common Prosperity are here to stay.

Moving to 2023, China’s outlook may seem unpredictable, however, it is clear that foreign investment in China has moved into a new era.

Author: Roberto Gilardino, Managing Partner APAC, Horizons Corporate Advisory

This content appears as a courtesy of Horizons Corporate Advisory, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit www.horizons-advisory.com. 

The post China’s outlook in 2023: what’s shaping business strategies appeared first on China Collaborative Group.

The task of cultivating a newly formed association during extraordinary times was not a simple task. The Board were required to adapt to pandemic related challenges. Nonetheless, the foundations of the association were successfully set forth. And despite the travel restrictions, several members completed cross-border transactions in Central America, Europe and Asia.

November 15 2022 marked another milestone for the association. The three-year mandatory term of the Board members ended and a new board was elected at the fourth CCG General Assembly. The new Board includes Roberto GILARDINO as President, Cengiz SÖYLEMEZOGLU (the Managing Partner of UNITEDKS, Turkey) as the Treasurer of the CCG; and Lucia Myriam Gisa NETTI (EMEA Regional Partner at Horizons, Italy) as the Secretary of the CCG, effective immediately. Roberto as the CCG President also sincerely thanked Martin and Bas’s dedication to the association during the three years.

With a newly elected board, a new chapter begins. The second term will generate new synergies and advance the work of the first Board members. To do this, the Board will strategically focus on these objectives:

• strengthening active collaboration between members
• fostering an unified association that represents the members’ interests
• facilitating business opportunities for the benefit of members

The vision remains that together the CCG navigates global companies to seize cross-border opportunities. Whether it is China inbound or outbound investments, our international team, holding extensive expertise, serve stakeholders in the comfort of their home country or region. And erase the geographical, language and cultural barrier that can make or break transnational transactions.

Equally, the new CCG chapter shall instigate new energy, actions, and dedication to further the association. Whilst no one can correctly predict the future, CCG remains confident that its diverse practices and global span can steer companies through adversity. This is the CCG spirit and CCG way.

Roberto GILARDINO

CCG President signed on behalf of the CCG Association

The post The CCG association: a strong worldwide network appeared first on China Collaborative Group.

Enacted in 1993, the Company Law has been revised several times with the latest adoption in 2018. In the amendment, long standings provisions are changed to simultaneously increase protection for bona fide parties and further regulate unethical practices. Major alterations are outlined below.

Share classes

Joint stock limited companies are permitted to issue other types of shares. Other than ordinary shares, shareholders may issue preferred shares and deferred shares, shares with a different number of voting rights, and determine corresponding rights protection for such shareholders.

Simplified procedures

Provisions to simplify administrative procedures improve the facilitation of company operations. Specifically, capital reduction and simplified deregistration procedures under specific conditions are simplified.

Registration Rules

A company registration chapter is added to enhance the administration procedure. Such addition elevates the Administrative Regulations of the People’s Republic of China on the Registration of Market Entities (effective on March 1, 2022) to the rule of law. In the chapter, further clarification is provided on matters and procedures related to the company’s establishment registration, alteration registration, and cancellation registration, and the company registration authority is instructed to optimise the registration process and improve the efficiency and convenience of registration.
Powers and duties of directors, supervisors, and senior management

The duties of loyalty and diligence of the directors, supervisors, and senior management are further stressed to protect stakeholder interests. Joint and respective liable are provisioned for those who cause damage to others in an intentional act or gross negligence whilst performing duties.

Shareholders’ right to know

Another addition is the right for shareholders to consult the register of shareholders and accounting vouchers. Shareholders can entrust agencies to access information, enable professionals of agencies to collate and analyze information and define reasonable decisions based on such insights.

The Revised Draft is envisioned to be adopted in 2023. For companies, the revisions advance the corporate legal framework in China and provide a greater legal basis for courts to handle disputes.

Furthermore, we foresee forthcoming corporate legislation supplementing the Revised Draft (once adopted) and arising from needs of social development, such as the latest series of laws, regulations, and standards related to information and data protection and security.

This content appears as a courtesy of Horizons Corporate Advisory, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit www.horizons-advisory.com. 

The post Revised draft company law in China: paving a significant chapter in corporate law appeared first on China Collaborative Group.

Werden im Rahmen einer Hausdurchsuchung Unterlagen und Datenträger sichergestellt, die aus der Sicht des Beschuldigten nicht durchsucht werden dürfen, so ist er berechtigt, diese versiegeln zu lassen. Als Siegelungsgründe gelten unter anderem persönliche Aufzeichnung des Beschuldigten sowie dessen Korrespondenzen mit seiner Verteidigung oder anderen Berufsgeheimnisträgern.

Ist ein Siegelungsbegehren rechtsgültig gestellt, so ist die Staatsanwaltschaft gehalten, innerhalb von 20 Tagen ein Entsiegelungsbegehren beim zuständigen Zwangsmassnahmengericht zu stellen.

Als anerkannt galt bis anhin, dass der Siegelungsantrag an keine Form gebunden ist. Insofern konnte dieser auch mündlich vor Ort oder gar telefonisch eingebracht werden. Ebenso herrschte Klarheit darüber, dass der Siegelungsantrag in unmittelbarem zeitlichen Zusammenhang mit der Sicherstellung der betreffenden Unterlagen bzw. Datenträger zu erfolgen hat.

Unklarheit herrschte demgegenüber über die Frage, inwiefern im Siegelungsantrag auf die einzelnen Siegelungsgründe einzugehen ist. In einem neu ergangenen Entscheid stellte das Bundesgericht hierzu fest, dass zur Glaubhaftmachung eines Siegelungsantrags mindestens ein Siegelungsgrund geltend gemacht werden muss. Die Siegelungsgründe müssen dabei zwar noch nicht im Detail begründet werden, aber es muss mindestens ein Siegelungsgrund sinngemäss vorgebracht werden (BGE 1B_273/2021, E. 3.3 f).

Es empfiehlt sich daher, bereits anlässlich einer Hausdurchsuchung die entsprechenden Siegelungsgründe möglichst exakt zu benennen. Andernfalls läuft man Gefahr, dass die entsprechenden Sicherstellungen unversiegelt der Staatsanwaltschaft zur Durchsuchung ausgehändigt werden.

Author: Darko Radovic

This content appears as a courtesy of HütteLAW, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit www.huettelaw.ch.

The post Federal court tightens the requirements for the enforcement of sealing grounds appeared first on China Collaborative Group.

Personal information violations can be severe, namely, the Criminal Law of the People’s Republic of China elevates the illegal sale or provision of citizen’s personal information to another to a criminal offense. Under Article 253 of the Criminal Law, individual violators face a maximum 3-year imprisonment term for serious violations and under exceptionally serious circumstances, an imprisonment term of 3-7 years. Equally, if the company commits the criminal offence, any directly liable officers or other directly liable individuals of the company shall be convicted and subject to the relevant criminal penalties. Therefore, companies should implement strict measures to regulate the use and disclosure of personal information.

In the below, we summarise the main do’s and don’ts of using and disclosing for companies handling the personal information of individuals located in China.

Do disclose personal information only when necessary and accordingly to law or within justifiable reasons

Article 1034 of the Civil Code defines personal information as the following:

Personal information refers to any information electronically or otherwise recorded that can be used, either alone or in combination with other information, to identify a specific natural person, including the name, date of birth, identification document number, biometric information, address, telephone number, email address, health information or whereabouts of the natural person. 

Under Specification, personal information shall only be disclosed under the following conditions:

• When a security impact assessment is conducted
• When consent is obtained
• When record-keeping and retention obligations are performed
• When stating restrictions during information disclosure

Do clearly state the nature of the disclose and obtain consent

Companies processing personal information are referred as the processors and obliged to obtain consent and disclose the use of the professional information under PIPL.

Specifically, processors shall inform the individual of the following matters in a visible, clear, and easy-to-understand language, truthful, accurate and complete manner.

• The organizational or personal name and contact information of the personal information processor;
• The purpose and method of processing personal information, the type of personal information to be processed and its retention period;
• The way and procedure for the individual to exercise his/her rights provided for by this Law; and
• Any other matter to be informed as required by law or administrative regulations.

Any changes to the above shall be informed to the individual and such individual shall be able to withdraw consent. In a withdrawal, processors shall halt the collection or promptly delete the collected personal information.

Equally, PIPL prescribes the following circumstances in which individual consent is not required for disclosure.

• Where it is necessary for the conclusion or performance of a contract to which the individual is a contracting party, or where it is necessary for carrying out human resources management under an employment policy legally established or a collective contract legally concluded;
• Where it is necessary for performing a statutory responsibility or statutory obligation;
• Where it is necessary for responding to a public health emergency, or for protecting the life, health or property safety of a natural person in the case of an emergency;
• Where the personal information is processed within a reasonable scope to carry out any news reporting, supervision by public opinions or any other activity for public interest purposes;
• Where the personal information, which has already been disclosed by the individual or otherwise legally disclosed.

Don’t neglect additional processing measures for sensitive personal information

For sensitive personal information, companies are required to protect such data, obtain specific consent for disclosure and inform the individual of the necessity and the impact on their rights and interests. Sensitive personal information refers to the following:

• Religious beliefs;
• Bio-metrics;
• Specific identities, medical and health;
• Financial accounts, whereabouts and other information of a natural person;
• Personal information of minors under the age of fourteen

Though the following personal information are forbidden to be disclosed

• Personal bio-metric information
• Genetic, disease and other personal physiological information
• Analysis results of the racial or ethnic identity, political opinions, religious beliefs or other sensitive personal data of Chinese citizens

Do adopt stringent control measures

The Guides requires companies processing personal information to establish administrative control system to prevent unauthorised disclosure such as leakage or tampering. Control systems should be implemented, audited and improved continuously to reduce risks and indirect violations. Additionally, the following technical control shall be implemented for robust controls.

• Establishing password and/or verification to protect the integrity and confidentiality of personal information.
• Adopting measures to detect, prevent, and combat threats against the systems processing personal information.
• Employing an authentication system to verifying the identity of users who have access to the personal information processing systems; implement and audit access control; and prevent and detect intrusions of malicious code and malware.
• Establishing data security in the authentication, access control, and audit; ensure data integrity, confidentiality, availability, and sanitation.

Don’t neglect legal liabilities  

The Specification is often serves as a guide for enforcers to regulate personal information disclosure. Companies failing to comply with the relevant rules and regulations can result in administrative and criminal liabilities.

Administrative liabilities

Those processing personal information in violation of this PIPL or failing to perform any obligation of personal information protection specified in PIPL in the processing of personal information will be ordered to make a correction, given a warning, and confiscated of any illegal gain. Any illegal activities shall be entered into credit files and be disclosed to the public.

Civil liabilities

Personal information infringement under the Cyber Security Law shall be ordered to make corrections and may be subject to following penalties either alone or in combination depending on the circumstances. Penalties include a warning, confiscation of illegal gains, and a fine between twice and ten times the illegal gains or a fine up to CNY 1,000,000 if there are no illegal gains on the organisation, as well as a fine between CNY 10,000 and CNY 100,000 on any directly liable officers or other directly liable individuals of the organisation.

In serious circumstances, the organisation may be ordered to suspend the relevant operation, suspend business for rectification, shut down its website or have its relevant business permit or business licence revoked.

Criminal liabilities

Under Article 253 of the Criminal Law, individual violators face a maximum 3-year imprisonment term for serious violations and under exceptionally serious circumstances, an imprisonment term of 3-7 years. Equally, if the company commits the criminal offence, any directly liable officers or other directly liable individuals of the company shall be convicted and subject to the relevant criminal penalties.

Conclusion

Enterprises using and disclosing data should adjust and adopt work practices accordingly to legal obligations. Understanding and monitoring the changes in new regulations is essential in navigating compliance commitments. At Horizons, we have been developing data compliance frameworks for large to medium-sized companies in China.

This content appears as a courtesy of Horizons Corporate Advisory, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit www.horizons-advisory.com. 

The post Using and disclosing personal Information in China – do’s and don’ts appeared first on China Collaborative Group.

Investment program highlights

Minimum investment amount

Investor may invest 250,000 EURO in real estate either as an individual or company purchase. The number of houses is not limited, if the total value of the properties amounts to 250,000 EURO or more. The property once purchased can be rented out.

Family Reunification

Both spouse and children under the age of 21 years old can be included in the investment program. Furthermore, residency can be extended to parents of both spouses. Both the applicant and family members can access the education, healthcare, insurance policies related to pensions and so forth.

Minimum stay per year

None

Investment Eligibility

Applicants need to meet the following requirements:

• Non-EU/EEA country citizen
• Min 18 years old
• No criminal record
• Obtain medical insurance
• Good character

Author: Maria Georgiou

This content appears as a courtesy of Georgios K Georgiou LLC, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information related to its content, please visit www.georgioullc.com

The post What you need to know about the Greek Golden Visa appeared first on China Collaborative Group.

Anwendbar ist der DSA auf alle Vermittlungsdienste, die ihre Dienstleistungen in der EU anbieten. Davon ausgenommen sind Klein- und Kleinstunternehmen. Es gilt analog zur DSGVO, die extraterritoriale Wirkung, weshalb somit auch Schweizer Online-Vermittlungsdienste, die ihre Dienstleistungen in Europa anbieten, grundsätzlich ab Inkrafttreten der Verordnung unter den DSA fallen. Nachfolgend wird zwischen vier Kategorien von Online-Intermediären unterschieden, wobei gilt, je höher die Kategorie, desto umfassender die Pflichten gemäss DSA.

Kategorie 1: Alle Vermittlungsdienste / Online-Intermediäre

• Pflicht, gegen illegale Inhalte vorzugehen und/oder Pflicht zur Herausgabe von Informationen, falls verfügt (keine Überwachungspflicht der Vermittlungsdienste / Online-Intermediäre);
• Einrichtung einer zentralen Kontaktstelle (single–point-of–contact) in der EU;
• Ernennung eines Rechtsvertreters, falls keine Niederlassung in der EU;
• Transparenzpflichten in den allgemeinen Geschäftsbedingungen;
• Mindestens jährliche Berichterstattung an den Koordinator für digitale Dienste des EU-Mitgliedstaates über Moderation von Inhalten.

Kategorie 2: Nur Hosting-Provider (inkl. Online-Plattformen)

• Alle Pflichten aus Kategorie 1 und zusätzlich:
• Pflichten zu Melde- und Abhilfeverfahren;
• Mitteilung der Gründe für Entfernung von Inhalten oder Zugangssperren;
• Veröffentlichung von anonymisierten Entscheiden.

Kategorie 3: Nur Online-Plattformen

• Alle Pflichten aus Kategorie 1 + 2 und zusätzlich:
• Beschwerde- und Rechtsbehelfsmechanismus sowie aussergerichtliche Streitbeilegung;
• Priorisierung von Meldungen von sog. „vertrauenswürdigen Hinweisgebern“;
• Massnahmen gegen missbräuchliche Meldungen sowie Gegendarstellungen;
• Sicherheitsüberprüfung von Drittanbietern;
• Transparenz von Online-Werbung gegenüber Nutzerinnen;
• Meldung von Straftaten.

Kategorie 4: Nur sehr grosse Online-Plattformen (mehr als 45 Mio. User/Monat)

• Alle Pflichten aus Kategorie 1, 2 + 3 und zusätzlich:
• Risikomanagement-Pflichten und Ernennung eines Compliance-Beauftragten;
• Jährliche externe Risikoprüfungen und öffentliche Rechenschaftspflicht;
• Transparenz der Empfehlungssysteme und Wahlmöglichkeiten für Nutzerinnen beim Zugriff auf Information;
• Datenaustausch mit Behörden aus der Forschung.

Bei Verletzungen drohen den Unternehmen empfindliche Geldbussen von bis zu 6% der Jahreseinnahmen oder des Jahresumsatzes. Zudem können Geldstrafen für fortgesetzte Verstösse in Höhe von bis zu 5% des durchschnittlichen Tagesumsatzes verhängt werden.

Besteht nun Handlungsbedarf für Ihr Unternehmen?

Zwar wird die Verordnung voraussichtlich erst 2023 in Kraft treten, wir empfehlen Ihnen jedoch, frühzeitig die kommenden Entwicklungen zum DSA zu verfolgen und insbesondere schon vorab abzuklären, ob Ihr Unternehmen unter den DSA fallen wird.

Haben Sie weitere Fragen? Das HütteLAW-Team berät Sie gerne.

Author: Stephanie Kaiser

This content appears as a courtesy of HütteLAW, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit www.huettelaw.ch.

The post Der neue Digital Services Act appeared first on China Collaborative Group.

While the above process is very important, the reality is that it only applies to 6% of land in Zambia, as the bulk of the land in Zambia is under customary tenure, representing a humongous 94% of the total land. This entails that anyone trying to acquire land in Zambia has a chance of encountering customary tenure and some basic idea about how to safely acquire land under customary tenure becomes very useful. Because there is no central registry for customary land, which is administered by traditional authorities, the following five pointers can be useful in successfully acquiring land subject of customary tenure, thereby reducing legal challenges:

The agreement to buy land must be in writing

It is a legal requirement, founded on the Statute of Frauds 1677, an English Statute applicable to Zambia that any transaction for the sale of land must be evidenced by a note or memorandum in writing, as a precondition for their enforceability in the courts of law. Therefore, at a minimum, similar to state tenure, a conveyance of traditional land must begin with a legally enforceable written agreement between the seller and the purchaser. The written agreement must not only specify the terms of the agreement but most importantly the location of the land and the extent of the land.

Involve independent witness, to the signing and identification of the land.

Traditionally, for anything to be readily accepted by all must be a ceremony. Therefore, make your purchase of traditional land a ceremony to enhance the chances acceptance by all concerned in that society. Ensure that the written document is witnessed by other persons in the village or area, and not just immediate family members of the vendor.  The witnesses must not just witness the signing of the agreement, but also the actual piece of land and its dimension. Independent witnesses also hedge against encroaching into other people’s land, in addition to being a due diligence safeguard, as few people would want to openly support an illegality in broad daylight.

Notify the Headperson and be entered in the village register

All traditional land, though vested in the Republican President is actually under the custody of the area traditional chief, who is represented by the headman or woman at village level. To complete the purchase, the transaction must register with the area headperson, and the purchaser’s name duly registered into the village register to signify that the local custodian is fully aware of your interest as a purchaser. Additionally, this step helps to confirm the authenticity of the land being sold.

Record with the area chief

As already indicated, the ultimate custodian of the customary land is the area Chief, and following your entry into the village register, check that your record is transmitted to the area Chief. This step will also help you at a later stage, should you decide to covert to state tenure, as the Chief’s endorsement is a precondition for any such conversion.

Take possession

You are truly not secure, unless you are actually on the land. This means you must begin working the land, either farming or clearing or doing something which signifies your presence thereon. Legally, another person cannot take a better interest over that land as they are mandated to carry out an investigation to ascertain your interest. If you are not in possession of the land, a third party may take a better interest than you, provided they are unaware of your interest, likely to happen when you are not in possession. This also reduces chances of encroachments with other land owners.

These steps will help greatly to successfully acquire an interest in land subject of customary tenure, before you decide to convert the same interest to customary tenure, a topic we shall address separately later.

Conveyancing Team

Equitas Legal Practitioners

Client Legal Alert – Equitas Legal Practitioners@2022

*This scholarly article is a general guide and does not contain definitive legal advice. Readers considering taking action on any of the issues discussed should speak to their legal advisors before taking any such action. Equitas disclaims any liability whatsoever arising from acting on this article.

This content appears as a courtesy of Equitas Legal Practitioners, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit https://equitas-legal.com/.

The post Conveyancing of Traditional Land in Zambia – 5 Pointers appeared first on China Collaborative Group.

• Provisional Regulations on Enterprise Information Disclosure (“Provisional Regulations”), effective from 1 October 2014

• Interim measures for administration of List of Enterprise with Abnormal Operations (“Interim Measures”) effective from 1 October 2014

• Administrative Measures for Market Regulation of the Seriously Illegal and Dishonest Entities List (“Administrative Measures for Dishonest Entities List”), effective from 1 September 2021

• Administrative Measures for Market Regulation of Credit Restoration (“Administrative Measures for Credit Restoration”), effective from 1 September 2021

The Provisional Regulations requires enterprises to submit the annual report for the previous year between the 1st January to 30^th June, and publicly disclose such information. The information submitted and disclosed shall include the address and contact number of the company, operation status of the company (open, closed or liquidated), investment or shares purchasing related information, capital contribution, contribution date and form of contribution by the company’s shareholder, number of employees, total assets, total liabilities, operating income, main business income, total profits, total tax paid, and so forth.

Enterprises who do not submit the annual report on time shall be listed as Enterprise with Abnormal Operations, as stipulated in the Interim Measures.

Also, enterprises will be listed as Enterprise with Abnormal Operations in the following cases:

• Failing to disclose information upon alteration as according to Article 10 of the Provisional Regulations, and failing rectify the violation on time after being notified by the administrative management department

• Concealing the real situation or practicing fraud when disclosing enterprise information

• Failing to contact enterprise at the registered address (site of business operation)

If an enterprise is listed as an Enterprise with Abnormal Operations and rectifies such violations on time, may apply to be removed. Specifically, the Interim Measures, provision the specific rectifications:

• Enterprises who fail to submit the annual report on time may apply to be removed upon submitting and publishing the annual report.

• Enterprises who fail to disclose information after alteration on time shall publish the altered information. Then apply to regain its normal operation status record at the administration of industry and commerce.

• Enterprises who could not be contacted at its registered address, may regain its normal operation status record after conducting the regular procedures for alteration of registered address or business operation site, or claimed that the Enterprise can contacted at its registered address.

From the listed date, enterprises listed as Enterprises with Abnormal Operations and exceeding three years will be listed as “seriously illegal and dishonest enterprises”. As “seriously illegal and dishonest enterprises”, enterprises will face severe negative image and reputation.

Therefore, enterprises should take corrective actions promptly when listed as “enterprises with abnormal operations”, and apply to be removed at the competent administration of industry and commerce as according to the aforesaid procedures.

Dishonest Entities List

The Administrative Measures for Dishonest Entities List, defines the Dishonest List as companies that:

• seriously endanger people’s health and life safety,
• seriously destroy the fair market competition order and normal social order,
• refuse to perform legal obligations,
• seriously affect the credibility of administrative organs and companies with other serious illegal and dishonest behaviors.

Generally, enterprises in industries directly related to the people’s life, health and safety are affected including food, drugs, special equipment, and other related sectors.

Similar to the “Enterprise with abnormal operations list”, enterprises, listed as “illegal and dishonest enterprise” for more than one year, may request to be removed at the competent Market Supervision Administration. Specifically, the Administrative Measures for Credit Restoration stipulates the below preconditions:

• The enterprise has fulfilled the obligations provided in the administrative penalty
• The enterprise has proactively rectified the negative impacts and consequences
• The enterprise is no-longer subject to further serious administrative sanctions provisioned by the relevant administrative departments

Removal from the “abnormal operations list” or “illegal and dishonest enterprises list” will not delete the historical record of enterprises being listed. Rather such records are held on the company’s credit file and publicly disclosed.

Therefore, understanding and comply with the Chinese laws and regulations is essential to enterprises’ operations and entire life-circle. Any irregularities detected by the competent authorities will be an irreversible record for the company.

This content appears as a courtesy of Horizons Corporate Advisory, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit www.horizons-advisory.com. 

The post Operating business in China? Here are two blacklists to avoid appeared first on China Collaborative Group.

Im Gesuch ist die finanzielle Situation der Gesellschaft darzulegen, wobei das Gesuch gemäss Art. 293 ff. SchKG zwingend folgende Beilagen zu enthalten hat:

• eine aktuelle Bilanz der Gesellschaft
• eine Erfolgsrechnung
• eine Liquiditätsplanung oder entsprechende Unterlagen, aus denen die derzeitige und künftige Vermögens-, Ertrags- oder Einkommenslage des Schuldners ersichtlich ist, sowie
• ein provisorischer Sanierungsplan

Die Gesuchstellerin kann das Gericht um provisorische Nachlassstundung für maximal vier Monate ersuchen. Auf Antrag kann die provisorische Nachlassstundung in begründeten Fällen um weitere vier Monate verlängert werden. Ein Gesuch wird bewilligt, sofern nicht offensichtlich keine Aussicht auf Sanierung oder Bestätigung eines Nachlassvertrages besteht. Das Nachlassgericht hat die provisorische Stundung unverzüglich nach Eingang des Gesuches zu behandeln und trifft von Amtes wegen weitere zur Erhaltung des schuldnerischen Vermögens notwendige Massnahmen (Art. 293a Abs. 1 SchKG).

Nach Art. 293b SchKG setzt das Nachlassgericht einen oder mehrere Sachwalter zur näheren Prüfung der Aussicht auf Sanierung oder Bestätigung des Nachlassvertrages ein. In begründeten Fällen kann jedoch von der Einsetzung eines Sachwalters abgesehen werden.

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Author: Larissa Kälin

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