Authored by Dr. Zhan Hao (zhanhao@anjielaw.com), Huang Zaizai (huangzaizai@anjielaw.com), Xu Wei (xuwei@anjielaw.com), Han Rubing

The environment problem has been an important issue for Chinese government.  Surveys and conversations on China’s vibrant social-networking services show increasing public concerns over environmental pollution. Recently, the episodes related to PM 2.5 and Beijing Cough are the obvious instances. Under this backdrop, we discuss the development of environmental pollution liability insurance in China.

In 2007, the State Environmental Protection Administration (the name has been changed to Ministry of Environmental Protection of the People’s Republic of China(“MEP” since 2008),) and the China Insurance Regulatory Commission (“CIRC”) jointly issued a guide on environmental pollution liability insurance, Guidelines on Environmental Pollution Liability Insurance (MEP Issued [2007] No.189, “2007 No.189 Guidelines”). In 2007 No. 189 Guidelines, MEP and CIRC jointly encouraged local government to promote the environmental pollution liability insurance system in their own administrative regions.  It said an environmental pollution liability insurance system suitable for the national conditions of China should be preliminarily established during the period of the 11th Five-Year Plan, which is from 2006 to 2010.  Pilot and demonstration projects thereof should be carried out in major industries and regions to preliminarily establish the directory of covered enterprises or facilities of key industries based on the degree of environmental risks and the standard of compensation. 

Continue Reading Another Kind of Compulsory Insurance?

Authored by Michael Gu (michaelgu@anjielaw.com)

Background

Just one and half months following the breakthrough LCD cartel case, the Chinese price-monopoly watchdog, two provincial branches of National Development and Reform Commission of the People’s Republic of China (“NDRC”), rendered another harsh punishment against two luxury Chinese Liquor producers.

On 22 February 2013, the NDRC’s provincial branches (i.e. Guizhou Provincial Price Bureau and Sichuan Development and Reform Commission) officially announced that two most famous Chinese liquor producers were respectively fined RMB 247 million and RMB 202 million for their monopoly behaviors. The total penalties combined amount to RMB 449 million, overtaking the total penalty of RMB 353 million imposed on six internal LCD manufacturers early last months, reach a new record high since the China’s Anti-monopoly Law came into force in 2008.  

Continue Reading Rumors Come True:NDRC Imposes Record High Penalties on Luxury Chinese Liquors

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com), Michael Gu (michaelgu@anjielaw.com), Dr. Song Ying (songying@anjielaw.com)

Just after the Chinese New Year, according to relevant source, the National Development and Reform Commission (‘NDRC’), one of the three main China’s anti-monopoly enforcement authorities may impose a new high penalty amount to CNY 449 million ( equal to 71.47 million USD) against two Chinese high-end liquor companies soon, 247 million for Kweichow Moutai and 202 million for Wuliangye respectively.

This action of NDRC actually is only around one and a half month following the LCD case’s 353 million-penalty in January, which can’t be denied that NDRC is becoming more and more aggressive regarding its steps of China’s antitrust enforcement.

As a matter of fact, Kweichow Moutai has issued a statement on its website as early as 15 January 2013 that it will cancel the marketing policies which may violate the Anti-Monopoly Law of China (AML) and conduct a complete rectification due to the investigation by the NDRC and the Price Bureau of Guizhou Province. On 18th of the same month, another top liquor company Wuliangye also published the announcement expressing its cooperation attitude to make rectification in compliance with the AML. Some people forecasted at that time that NDRC may suspend the case partly due to the Stated-owned Enterprise (ome ’) identity of the two and another ground may rest on that vertical agreements at the present time was not the priority of NDRC’s enforcement yet. Only one month later, however, people are surprised that a new record fine may be imposed on these two SOEs soon. 

Continue Reading NDRC May Fine Two Famous Liquor Companies RMB 449m

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com), Michael Gu (michaelgu@anjielaw.com), Dr. Song Ying (songying@anjielaw.com)

At the end of 2011, the Administration for Industrial and Commerce in Hunan province had received multiple reports concerning monopoly agreements and elimination of competition on new auto insurance market conducted by the New Auto Centre.

The State Administration of Industry and Commerce (SAIC) authorized the administrative bureau for industry and commerce in Hunan (Hunan administrative bureau) to further investigate the case.

Accordingly Hunan administrative bureau opened formal antitrust proceedings to investigate the involved enterprises. During the investigation, the implementation of the monopoly agreements has been suspended by the parties and the monopoly behavior of New Auto Centre has been stopped by Hunan administrative bureau.

According to the investigation, the enterprises, which under the organization of the insurance associations in some cities of Hunan province, have concluded a monopoly agreement on car insurance issues and set up the New Auto Centre to implement the agreement. The investigated enterprises made it compulsory for all new car owners to purchase the insurance from the New Auto Centre. Such agreement obviously has segmented the market of new auto insurance.

Continue Reading Auto-insurance Monopolistic Case Investigated in Hunan

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

During the last two years, the China Insurance Regulatory Commission (CIRC) has issued several new policies for insurance proceeds investment, but the distribution is unclear at this stage, leaving insurance companies seeking guidance.

Declining profits in the insurance business is the leading incentive for CIRC to issue new investment policies for insurance proceeds. According to reports for the first three quarters of 2012, three of the four major listed insurance companies in China faced declining performances and suffered huge losses. In the third quarter, the loss of China Life Insurance Company stood at Rmb 2.207 billion ($3.54 million) and its net profit in the first three quarters declined by 56% year-on-year. The situation of China Pacific Insurance was similar, as its net profit of the third quarter was around Rmb 0.5 billion, down by 58.7% year-on-year. For New China Life Insurance, the net profit of the third quarter also declined by 15% year-on-year.

Continue Reading Investing Using Insurance Proceeds

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com), Huang Zaizai (huangzaizai@anjielaw.com), Xu Wei (xuwei@anjielaw.com), Chen Xingfa (chenxingfa@anjielaw.com), Han Rubing

At the beginning of 2013, CIRC (China Insurance Regulatory Commission) and PRC Supreme Court jointly issued a notice to establish the collaboration system to link insurance litigation to mediation in some areas.

The Notice stipulates that in the experimental areas, local courts shall publish the panel list of mediation entities and mediators, and ensure the parties of litigations to choose the mediation entities and mediators at their discretion during the course of litigations. To enhance the mediation, the Notice specifically requires the local with capacity could set the special mediation office for the use of insurance dispute mediation.

Insurance Association of China and its local branches (the local association of insurance) are responsible for the setup of the insurance mediation entities, and training for mediators.

Continue Reading CIRC and Supreme Court Launch ADR System for Insurance Disputes

Authored by He Jing (hejing@anjielaw.com)

China’s National People’s Congress (NPC) has released the latest version of the proposed amendment to its Trademark Law for public comments until January 31, 2013. This window may present the last opportunity for the international business community to make requests for reforms to the Law.

The latest draft proposes changes to about 40 provisions. Some of the changes are well anticipated and may prove beneficial for all brand owners. For example, the expansion of trademark formats to include sounds and single colours which may be sufficient to distinguish the subject goods. Also, the provisions allowing trademark applications to cover goods in multiple classes, which will alleviate some of the burden of applicants who wish to file in multiple classes.

However, on one of the most compelling issues — bad faith trademark filings or trademark squatting — the proposed changes could have some unintended consequences, which may arguably create a more complicated situation.

Continue Reading Proposed Amendment to China Trademark Law Complicates Squatting Issues