When Chinese investors are considering US targets, it is important to keep in mind the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”). For deals meeting certain thresholds, the HSR Act requires the parties to submit HSR filings to FTC and DOJ, pay a filing fee, and wait 30 days before closing. The purpose of this is to permit FTC and DOJ to investigate the potential antitrust and competition issues before the transaction closes. Failure to make a filing and/or observe the 30-day waiting period can have severe consequences. Currently, the maximum civil penalty for noncompliance is $43,792 per day.
Continue Reading HSR Considerations For Chinese Investors In U.S. Companies 投资美国企业的中国投资者在HSR申报中需要注意的问题

On May 13, 2015, the highest judicial institution in China, the Supreme People’s Court, issued the Detailed Rules of Implementation of the Provisions of the Supreme People’s Court on Case Guidance Work (“《最高人民法院关于案例指导工作的规定》实施细则”) (“Detailed Rules”).  This judicial interpretation marks a significant step in improving the Case Guidance System (案例指导制度) in China’s judiciary.  In the past five years, ten sets of cases totaling fifty-two cases (see Appendix) have been released by the Supreme People’s Court.  The so-called Case Guidance System was formally established on November 26, 2010, with the issuance of the Provisions of the Supreme People’s Court on Case Guidance Work (“最高人民法院关于案例指导工作的规定”).
Continue Reading Clash of Civil and Common Law: Case Guidance System v. Stare Decisis

The China Securities Regulatory Commission (CSRC) has revised the rules on margin trading and short selling in response to the current conditions surrounding China’s stock market. The new rules were released to the public on June 12, 2015 as a draft document for public comment.[1]  These new rules have the potential to ease investor concerns over the volatility of the market as well as bring about more favorable returns when closing out investor contracts.  Since the announcement of the new rules, the markets here in China have fluctuated in response with a 13% decline across the Shanghai Composite Index during the week following June 12th’s market peak.[2]  The new rules address the contract length for margin trading and would allow for an extension of contract terms beyond the current fixed period of six months.  Additionally, the new rules will ease barriers to enter the market and work with securities brokerages in China.
Continue Reading Changes in Margin Trading and Short Selling Regulations and the Potential Impact on Client Investment’s Through QFII A-Shares

The Chinese e-commerce industry is rapidly expanding, and the nation is the world’s second largest online retail market. The business-to-consumer industry in particular is expected to see record growth in the next few years. Until recently, the e-commerce market was not specifically regulated. The Chinese government, however, has begun to implement regulations to boost the e-commerce industry for a more consumption-driven economy, including regulations to protect consumers and to more tightly regulate online sellers. For example, the Law on the Protection of Consumer Rights and Interests[1] was revised in March of 2014 to grant consumers a right to return goods within seven days after purchase without giving a reason, to require online sellers to register their names and addresses, and to require sellers to authenticate and verify their websites. The government has also been active in fighting against online sales of counterfeit products. And, most recently, China announced it will allow full foreign ownership of some e-commerce businesses to increase competition and development.[2]…
Continue Reading Guiding Opinions to Promote Healthy and Rapid Development of Cross-Border E-Commerce

The Ministry of Human Resources and Social Security, the Ministry of Foreign Affairs, the Ministry of Public Security and the Ministry of Culture jointly issued a notice of the Relevant Handling Procedures for Foreigners Entering China for the Accomplishment of Short-term Work Assignments (the “Notice”) on November 6th, 2014 and this Notice became effective on January 1st, 2015.
Continue Reading Work and Resident Permits for Short-Term Working Foreigners

The China International Economic & Trade Arbitration Commission (CIETAC) approved a new set of arbitration rules effective on January 1, 2015.  The 2015 CIETAC Rules include a number of important updates and revisions that bring CIETAC arbitration proceedings closer in line with international arbitration practices. The revisions include the following:…
Continue Reading China Arbitration Update: New CIETAC Rules Effective January 1, 2015

The General Administrations of Customs issued the Interim Measures of the Customs of the People’s Republic of China for the Administration of Enterprise Credit (the “Interim Measures”) on October 8th, 2014, which is effective as of December 1, 2014.

Under the Interim Measures, companies are classified by the China Customs into the following three categories based on their credit status: (i) authorized enterprise (认证企业); (ii) general credit enterprise (一般信用企业); and (iii) uncreditable enterprise (失信企业).…

Continue Reading New Customs Credit Measures