This China Newsletter provides an overview of key developments in the following areas:
- Antitrust
- SAMR Solicits Comments on Guide to the Anti-Monopoly Compliance of Businesses
- Compliance
- NPC Passes 12th Amendment to the Criminal Law
- The State Council of the PRC Introduces Implementing Rules of Consumer Rights Protection Law
- Data Privacy & Cybersecurity
- China Proposes New Regulation Over Surveying and Mapping Data
- China's Natural Resources Regulators Make Strides in Data Security Management with New Rules
- Foreign Investment
- China Issues New Measures to Attract Foreign Investment.
- China Updates Catalogue of Encouraged Industries for Hainan.
- International Trade
- CGAC issues Administrative Measures for Duty-Free Management of Goods Imported into the Guangdong-Macao In-Depth Cooperation Zone in Hengqin
- MOFCOM Issues Negative Lists for Cross-Border Services Trade
Antitrust
SAMR Solicits Comments on Guide to Anti-Monopoly Compliance of Businesses
市场监管总局就《经营者反垄断合规指南》征求意见
On March 21, 2024, the State Administration for Market Regulation (SAMR) published the draft Guide to Anti-Monopoly Compliance of Businesses for a public comment period, which closed on April 3, 2024.
While these compliance guides are not legally binding, they offer general guidance for complying with the Anti-Monopoly Law of the People's Republic of China (PRC). Currently, there are approximately 30 compliance guides covering both state and local regulations.
Unlike previous guides, the new Guide includes a chapter titled "Compliance Incentives." This section encourages entities to actively foster a culture of fair competition and establish robust anti-monopoly compliance management systems. When investigating and addressing monopolistic behavior, competent antitrust enforcement authorities may consider the effectiveness of entities' anti-monopoly compliance systems. The Guide provides details on different compliance incentive scenarios, such as pre-investigation incentives, incentives within commitment systems, leniency incentives, discretion in fine ranges, substantive reviews, and situations where compliance incentives are not awarded. The potential for incentives may motivate entities to establish and implement anti-monopoly compliance systems.
The Guide encourages entities to establish a robust compliance system based on market status, industry practices, and specific conditions. This system may involve the following departments: (i) anti-monopoly teams responsible for leading compliance efforts; (ii) business departments to handle daily compliance tasks; and (iii) functional departments (such as legal and audit) to conduct compliance activities within their respective capabilities.
Compliance
NPC Passes 12th Amendment to the Criminal Law
全国人大常委会通过《刑法修正案（十二）》
On Dec. 29, 2023, the Standing Committee of the National People's Congress (NPC) of the PRC adopted Amendment XII to the Criminal Law (Amendment XII), which took effect March 1, 2024. Amendment XII comprises eight articles that strengthen penalties for offering bribes and address internal corruption within non-state entities.
Key points:
- Article 390 of Amendment XII outlines seven aggravating circumstances related to bribery that trigger stricter penalties for offenders who repeatedly offer bribes, offer bribes to multiple recipients, or bribe state functionaries, supervisors, administrative law-enforcing officers, or judicial officers.
- Amendment XII introduces personal criminal liability for executives in foreign-invested enterprises, aligning their risk with that of Chinese state-owned enterprise executives. Executives can be held accountable for actions like obtaining illegal benefits through similar business operations, transferring profits to relatives or friends, or accepting substandard goods or services. Penalties may include imprisonment up to seven years and fines.
Amendment XII reflects the ongoing efforts of Chinese regulators to combat corruption across various industry sectors, including both public and private domains.
PRC State Council Introduces Implementing Rules of Consumer Rights Protection Law
国务院公布《消费者权益保护法实施条例》
The State Council of the PRC introduced the Implementing Rules of Consumer Rights Protection Law (Implementing Rules), which outlines obligations for sellers. This regulation took effect July 1, 2024.
Highlights of the Implementing Rules:
- Safety. The Implementing Rules emphasize the seller's responsibility for the consumer's personal safety as well as the safety of the consumer's property, including products the seller provides in the form of awards, giveaways, free use, etc. The seller must ensure consumer safety and inform them of any product defects.
- Right to know. The seller must ensure consumers' right to information and refrain from providing false transaction details, fabricated sales dates, or fake customer reviews. Additionally, in the context of e-commerce, the seller should not offer different prices for the same product or service based on a consumer's profile. Automatic payment renewals must be clearly notified to the consumer.
- Right to choose. The consumer has the right to choose, and the seller shall neither employ technical methods to coerce the consumer into accepting its product or service nor restrict the consumer's right to choose another seller. If the product or service is bundled, the seller should clearly inform the consumer.
- Personal information protection. Sellers are prohibited from collecting consumers' personal information through "one-time permission," "implied permission," or by pressuring consumers to grant permission. Additionally, sellers shall refrain from sending commercial messages or making unsolicited calls to consumers without their consent.
- Notice of ceased operation or relocation. If a seller decides to cease operation or relocate, they shall provide consumers with 30 days' advance notice. This notice can be posted at the seller's physical location, on their website, or in their e-store.
- Cancellation rights. The seller shall not extend the scope of products for which consumers are not granted the right to return without cause. Typically, items exempt from the seven-day no-reason return policy includes custom-made goods, fresh and perishable items, digital downloads or opened audio-visual content, etc. Additionally, if a consumer has opened a product package but has not altered the quality, function, or appearance of the product, the seller should provide a refund.
In addition to the above, the Implementing Rules also address other aspects of the Consumer Rights Protection Law, such as standard form contracts, special protections for elders and minors, and procedures related to repair, replacement, and refunds, etc.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.