Latest Legal News
IPRs. Supreme Court issues Opinions on Due Implementation of National Intellectual Property Strategy
The Supreme Court issued the Opinions on Due Implementation of National Intellectual Property Strategy (hereafter referred to as “Opinion”), which stipulates the overall plan for the court to implement the national intellectual property rights. The Opinion consists of 6 parts and includes 36 articles.
The Opinion increases the civil compensation liability and crime liability for malicious IPRs infringement. Article 5 and article 21 dedicate that the court shall adhere to full compensation principle, enlarge the scope and degree of application and enforcement of the fine penalty and take steps to deprive the infringers of their abilities to recommit to the crime.
Criminal, civil and administrative IPRs proceedings will be exclusively handled by IPRs tribunals and the special appellate court is intended to be established.
The Opinion stipulates principals separately for different IPRs cases, such as trademark, patent, copy right and Anti-Unfair Competition Law.
The courts will be more prudent in the reorganization of well-known trademark and in the application of the principal of Anti-Unfair Competition Law.
Anti-Trust & Competition Cases
1) MOC Rejects Coca Cola’s Merger Control Application for Acquisition of China Huiyuan Juice Group Ltd.(March 18,2009)
On March 18, MOC makes a statement that it has rejected Coca Cola’s merger control application for acquisition of China Huiyuan Juice Group. This is the first merger control application rejected by MOC since the Anti-Monopoly Law coming into effect.
According to Anti-Monopoly Law, MOC has taking the factors into consideration in this case, such as the impact on market share and control, the level of market concentration, the concentration on market entry and technology advancement, the concentration on consumers and related business operators and the market effect of Huiyuan brand. After the review, MOC decided that this acquisition would have an adverse impact on competition in the relevant market.
It takes about 1month for MOC to finish its first review and 3 months to decide on this case.
2) MOC Approves Mitsubishi Rayon’s Merger Control Application for Acquisition of Lucite with Conditions(April 24,2009)
On April 24, MOC made a statement that it has conditionally approved Mitsubishi Rayon merger control application fir the acquisition of Lucite International Group.
MOC has taking the following factors into consideration in this case, such as relevant market and competition, decides the concentration would have minor impact on the relevant product market and the merger would have an adverse impact on competition in China’s market. But MOC hold the belief that the proposal submitted by the applicants is enough to eliminate the adverse effect.
MOC approves the merger on the condition of production capacity strip-off and independent operation before the completion of the strip-off. Without approval of MOC, Mitsubishi Rayon shall not conduct any acquisition or building new factories after Merger.
MOC Delegates Authority to Approve Investment Companies with Foreign Capital
MOC issued The Notice on Delegation of the Authority to Approve the Establishment of Foreign-Invested Investment Companies (hereafter referred to as “Notice”) on March 6, 2009. The Notice intends to simplify the approval procedures make the approval process more efficient.
The Notice stipulates the establishment of a foreign-invested investment company whose registered capital is below USD 100 million and its alteration issues (except for any capital increase exceeding USD100 million at one time) shall be approved by commerce authorities of provinces, autonomous regions, municipals, the cities especially listed in the state plan, Xinjiang Production and Construction Corps and sub-province cities which including Ha’erbin, Changchun, Shenyang, Jinan, Nanjing, Hangzhou, Guangzhou, Wuhan, Chengdu and Xi’an.
The subsequent alteration issues (except for any capital increase exceeding USD 100 million or investors alteration) of foreign-invested investment company whose establishment is approved by MOC shall be approved by commerce authorities of provincial level.
China to Regulate Electronic Wastes
China's State Council, or Cabinet, announced on Wednesday a regulation, signed by Premier Wen Jiabao, on the disposal of waste electrical and electronic equipment, in a bid to promote recycling, environmental protection and safeguard human health.
Treatment will be done only by treatment firms, which get a license from local governments, said the regulation which will take effect on January 1, 2011.
A fund, paid for by domestic producers and sellers of imported electrical and electronic equipment, will offer subsidies for treatment.
The regulation outlines the government's backing for scientific research and technology development on disposal as well as the use of new equipment and technology. It also bans the use of out-dated treatment methods for waste equipment.
Since 2003, more than five million TV sets, four million fridges, six million washing machines and five million computers have needed treatment each year, said the State-owned Assets Supervision and Administration Commission.
(Xinhua News Agency March 5, 2009)
New Food Safety Law
China's top legislature approved the Food Safety Law on Feb. 28, providing a legal basis for the government to strengthen food safety control "from the production line to the dining table."
The law, which goes into effect on June 1, 2009, will enhance monitoring and supervision, toughens safety standards, recall substandard products and severely punish offenders.
Earlier reports said China's Health Ministry would mainly handle food safety monitoring, evaluation and investigation of food safety emergencies. It would also be responsible for the general coordination of departments and promotion of local health authority reform.
The Health Ministry would also be responsible for the general coordination of departments and promotion of local health authority reform.
The Ministry of Industry and Information Technology was committed to creating a credit record system among food manufacturers and strengthening self-discipline in the food industry.
The Agriculture Ministry should take effective measures to secure the quality and safety of farm produce at source and promote standardized agricultural production.
The State Administration for Industry and Commerce was responsible for regular inspections of retail and wholesale markets and the establishment of a long-term supervision system on food distribution links.
The General Administration of Quality Supervision, Inspection and Quarantine along with the State Food and Drug Administration (SFDA) would mainly deal with producer access to the industry and the market.
The SFDA would also conduct large inspections of sanitation at restaurants.
Chinese Health Ministry to lead implementation of food safety law
BEIJING, March 2 (Xinhua) -- China's Health Ministry is to take the lead among the government's departments tasked with implementing the new Food Safety Law, Vice Health Minister Chen Xiaohong said Monday.
Detailing the division of responsibilities for enforcing the law, Chen said a joint leading group consisting of nine departments had been founded to deal with nationwide food safety supervision.
The Health Ministry would mainly handle food safety monitoring, evaluation and investigation of food safety emergencies, Chen told a press conference.
The Health Ministry would also be responsible for the general coordination of departments and promotion of local health authority reform.
The Ministry of Industry and Information Technology was committed to creating a credit record system among food manufacturers and strengthening self-discipline in the food industry.
The Agriculture Ministry should take effective measures to secure the quality and safety of farm produce at source and promote standardized agricultural production.
The State Administration for Industry and Commerce was responsible for regular inspections of retail and wholesale markets and the establishment of a long-term supervision system on food distribution links.
The General Administration of Quality Supervision, Inspection and Quarantine along with the State Food and Drug Administration (SFDA) would mainly deal with producer access to the industry and the market.
The SFDA would also conduct large inspections of sanitation at restaurants.
China's legislature approved -- with 158 votes out of 165 -- the Food Safety Law Saturday, providing a legal basis for the government to strengthen food safety control "from production line to dining table".
The law requires the State Council, or Cabinet, to set up a state-level food safety commission to oversee the entire food monitoring system, whose lack of efficiency has long been blamed for repeated scandals.
The draft law had been revised several times since it was submitted to the National People's Congress Standing Committee for the first reading in December 2007.
Tax Administration on Foreign Enterprise Representative Offices
The Provisional Measures for Tax Administration of Foreign Enterprise Representative Office ("Provisional Measures") was issued by the State Administration of Taxation on February 20th, 2010 and became effective since January 1st, 2010.
According to the Provisional Measures, the minimum rate of profit, which should be used in the calculation of taxes, has been increased from 10% to 15%.
In general, there are three kinds of taxes levied on foreign enterprise representative offices: 1) the enterprise income tax, 2) the business tax, and 3) the "river way management charge" based on the business tax.
Before the Provisional Measures was applied, the enterprise income tax was 2.94% of the expenses, the business tax was 5.9% of the expenses, and the river way management charge was 0.059% of the expenses.
Therefore, the overall tax burden was 8.899% of the expenses.
According to the Provisional Measures, the enterprise income tax shall be 4.69% of the expenses, the business tax shall be 6.25% of the expenses, and the river way management charge shall be 0.0625% of the expenses.
Therefore, the overall tax burden shall be 11.0025% of the expenses.
Therefore, the enterprise income tax is increased in a 1.75% of the expenses, the business is increased in a 0.35% of the expenses, and the "river way management charge" is increased in a 0.0035% of the expenses.
Therefore, the overall tax burden is increased in a 2.1035% of the expenses.
China's National People's Congress (NPC) Discusses Report on Water Pollution Control
China's National People's Congress (NPC), the country's top legislature, began discussing a report on water pollution prevention and control on Wednesday.
Zhou Shengxian, the Environmental Protection Minister, delivered the report at a plenary session of NPC Standing Committee.
China has paid increasing attention to ecological challenges and environmental problems as it seeks to balance its high economic growth rate with a rational use of natural resources and pollution control.
Zhou is to detail the country's efforts in curbing drinking water contamination and achievements in tackling water pollution in major rivers and rural areas.
The State Administration for Industry and Commerce issues New Rules on Capital Contribution with Equities
On 14 January, the State Administration for Industry and Commerce issued the Measures for Administration of the Registration of Capital Distribution with Equities (hereafter referred to as “Measures”), which comes into effect on 1 March, 2009. The Measures give the legal basis and clear guidelines for the registration of capital contribution in the form of equity transfer.
The Measures stipulates that the investor is permitted to make capital contribution into a PRC company established or to be established by transferring his equities in other PRC company. The transferred equities shall be clear in ownership, complete in terms of rights and transferable under the laws. The Measures also dedicates the situations where the equities shall not be transferred for capital contributions. The value of the foresaid transferred equities shall be appraised by qualified appraisers.
The Recycling Economy Promotion Law
The Recycling Economy Promotion Law, which comes into effect on January 1 2009, represents a significant step forward to an energy-saving and environmental-friendly society.
The law follows the "three Rs" (reduce, reuse, recycle) principle. The first R means reducing resource consumption and waste generation in the process of production, circulation and consumption. The second R means reusing waste and repairing, renovating or reproducing waste as products or components; and the last R directly using (recycling) wastes as raw materials or in waste regeneration.
Efficiency
The law also supports and encourages the use of high-efficiency and energy-saving products. Enterprises in the industries of electricity, petrol processing, chemical, steel and nonferrous and construction materials will be urged to use clean coal, coke and gas rather than fuel oil.
Pursuant to this law, industrial enterprises are required to apply advanced or appropriate water-saving technology and equipment, set up and implement a water-saving plan and control water consumption in the production process.
The law encourages the use of reclaimed water for urban road cleaning, greening and landscaping wherever possible, and states that waste heat and pressure should be used by enterprises with reclaiming technologies.
Energy-, water- and other resource-saving products should be used in restaurants, entertainment enterprises and hotels to avoid the waste of resources and environmental pollution.
Label. Catalogue and Tariffs
The energy-efficiency label will be another effective way to implement energy conservation. China has issued four catalogues of products with energy efficiency labels in the last four years.
The most recent catalogue covers six types of products, including computer monitors and photocopiers, and from March 2009 any products on the list that do not meet the specified standards of energy efficiency will not be allowed to be manufactured, sold, or imported into the Chinese market.
In addition to these rules and mechanisms, the government will issue a further catalogue of restricted one-off consumables and impose unfavourable tariffs and policies on exporting them.
Packaging
Excessive packaging is also being targeted. Product packaging standards will be enforced and enterprises should pay special attention to their product packaging design to avoid violation of applicable compulsory standards.
Liabilities. Recollection Duty
Modern manufacturers' responsibilities now extend to the re-collection and disposal of abandoned products. The central government will publish a catalogue of mandatory re-collection of products and packaging.
If products or packaging your company makes or uses are listed in the catalogue, you will have to collect the waste products or packaging for reutilisation (if possible) or for bio-safety disposal.
Manufacturers may entrust a third party, such as a distributor, to collect waste products or packaging.
High Energy or Water Consumption
Firms that are big enough and on the list of key enterprises with high energy or water consumption will be under the close scrutiny of the government of the relevant level.
In the Energy Conservation Law, which came into effect in April 2008, China already outlined a special monitoring and management system for high-energy-consuming enterprises. The Recycling Economy Promotion Law applies a similar mechanism to firms with high water consumption.
Challenges and Incentives
The law includes a series of incentives, such as the set up of special funds, tax incentives, financial programs with priority for recycling projects, and the implementing of government procurement policy to encourage the recycling economy.
Provincial and local governments have positively responded to the new legislation. Several indicators of the recycling economy will be included in assessments of local officials' performance. Therefore, some local governments have already enacted local incentive measures.