February 2009

Since October 2008, Private oil companies in China have been urging one another to take advantage of the Anti-Monopoly Law(AML) to secure a stable supply of oil and avoid over-reliance on the country’s two major oil producers for survival. They want new policies to create a level playing field. Currently they depend on the oil supplies of the China National Petroleum Corporation (CNPC) and the China Petroleum and Chemicals Corporation (Sinopec) as they are forbidden by law to extract or import their own.

Continue Reading How Private Oil Companies Face the Anti-monopoly Law in China

The question of whether a foreign judgment is capable of being enforced in China should be taken into account by all foreign investors who see China as a potential ground for expansion and development. The following should provide some clarity:

Article 126 of the Contract Law of the People’s Republic of China states:

"Parties to a contract with a foreign element may choose the law to apply to the handling of disputes, unless otherwise provided by law. If parties to a contract with a foreign element have not made a choice, the law of the State with the closest connection applies"
 Continue Reading Foreign Judgments and Chinese Courts – A Mixed Bag…Be Aware!

During the drafting of the Chinese Anti-monopoly Law (AML), the level at which the threshold of concentration notification was to be set, aroused fierce debate. In the end however, AML did not specifically stipulate the notification criteria in detail.Article 21 of AML states:

Business operators shall declare in advance the concentration reaching the threshold of declaration prescribed by the State Council to the Anti-monopoly Law Enforcement Agency, otherwise, they shall not implement the concentration.

Such a vaguely worded clause has caused confusion within the legal profession. It certainly begs the question: Why did AML not explicitly stipulate the threshold of notification? Examining both the lawmaking process prior to the creation of AML as well as the drafting of AML itself may prove to be helpful. 

Continue Reading The Threshold of Concentration: Anti-monopoly Notification in China

In the Chinese insurance market, it is common practice for a company to try to strengthen its supervision capabilities. In the past, special emphasis has been placed on supervision within departments – however, this is often inefficient. Therefore, financial regulatory institutions are beginning to focus on preventing risk by promoting internal supervisory mechanisms and the principle of compliance management.

Since Ping An Insurance Group initiated the establishment of the “Law & Compliance Department” in 2004 and theChina Insurance Regulatory Commission (CIRC) issued the Guidelines of Standardizing Governance Structure of Insurance Companies in January 2006 which state that insurance companies are required to establish a mechanism of compliance management to strengthen the inspection and evaluation of compliance, other domestic insurance companies have followed suit. In 2007, CIRC issued the formal Guidelines for the Compliance Management of Insurance Companies (hereafter Compliance Guidelines) which provide direct policy guidelines for the establishment of departments of compliance.
 Continue Reading CIRC Compliance Guidelines: Implementation for Chinese Insurance Companies

The Chinese legislator recently published the draft of the Chinese Insurance Law (revised). The draft is inherently different from the present Insurance Law of the People’s Republic of China. Therefore, the draft should be deemed as new rather than revised.

The current Insurance Law has aroused fierce and serious criticism since its promulgation in 1995 and subsequent revision in 2002. Those who are insured, insurers, brokers, agents, loss adjusters and regulators are not satisfied with the current regulatory position surrounding the Insurance Law. The reasons which stem from this dissatisfaction are multiple.
 Continue Reading Just Move, A Big Step-comments on the draft of new insurance law of China