China Law Insight : China Law Insight: China Commercial and Intellectual Property Lawyers and Attorneys, Full Service Law Firm: King & Wood

By Yuan Min and Li Wenzhi  King & Wood's Insurance Group

In order to regulate transfers of insurance business by insurance companies, the China Insurance Regulatory Committee (CIRC) recently issued the Provisional Measures on Administration of Insurance Business Transfers by Insurance Companies (the "Measures"), which will become effective on October 1, 2011.

"Transfers of insurance business" refers to when an insurance company decides to transfer all or part of its insurance business to another insurance company through mutual consultation and negotiation. This transfer mechanism is a way for insurance companies to voluntarily exit from the insurance market.  The Measures do not apply to the following circumstances: (i) an insurance company that engages in the life insurance business and is transferring its insurance business as a result of being closed down or being declared bankrupt; (ii) an insurance company that fails to meet the prescribed solvency requirements and is forced by the regulatory committee to transfer its insurance business; and (iii) an insurance company in the reinsurance business.

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作者：袁敏、力文智 金杜律师事务所保险组

为规范保险公司保险业务转让行为，保监会近日颁布了《保险公司保险业务转让管理暂行办法》（以下简称《办法》），并将于2011年10月1日正式实施。

保险公司的保险业务转让，是指保险公司在平等协商基础上将其经营的全部或者部分保险业务自愿转让给其他保险公司的行为。保险业务转让制度是保险市场退出机制的重要组成部分。经营有人寿保险业务的保险公司在被撤销或者破产情形下发生的保险业务转让，因偿付能力不足而被监管机构强制要求的保险业务转让，以及再保险业务，都不适用该《办法》。

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By King & Wood's Trademark  Practice

Recently, Beijing First Intermediate People’s Court has accepted an administrative lawsuit lodged by LOUIS VUITTON MALLETIER (the "Plaintiff"), against the China Trademark Review and Adjudication Board ("TRAB") with respect to its decision regarding the trademark "LV and 郎人LANGREN" (the "Mark") applied for by a local private company of "eyeglass chains, etc." in Class 9.

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By Susan Ning and Huang Jing

On 21 September 2011, Mr. Shang Ming, Director General of MOFCOM's Anti-Monopoly Bureau revealed the yearly merger control statistics at the BRICS International Competition Conference 2011 held in Beijing.

According to Mr. Shang, the merger control statistics for 2008, 2009 and 2010 are as follows: 

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By Susan Ning and Huang Jing

On 21 September 2011, Mr. Shang Ming, Director General of MOFCOM's Anti-Monopoly Bureau revealed the most recent legislative plan of MOFCOM' at the BRICS International Competition Conference 2011 held in Beijing.

According to Mr. Shang, MOFCOM will promulgate 3 new rules on merger control within this or next year. The 3 new rules are: Rules on Imposing Restrictive Conditions on Concentration of Operators (the "Rules on Remedies"), Rules on the Investigation and Handling of Violation of Notification Obligations for Concentration of Operators (the "Rules on Violation of Notification Obligations"), and Rules on the Investigation and Handling of the Concentration of Operators below the Notification Thresholds with Monopoly Suspicion (the "Rules on Mergers Below Thresholds").

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By Xu Xiaodan King & Wood’s Labor Group

The Provisional Measures on Social Insurance for Foreigners Working in China (the "Provisional Measures ") were issued on September 6, 2011 by the Ministry of Human Resources and Social Security and will come into effect on October 15, 2011. The Provisional Measures provide more specific rules on the requirement that foreigners working in mainland China should participate in the PRC social insurance scheme as stipulated in the PRC Social Insurance Law (promulgated on August 28, 2010, and came into effect on July 1, 2011). The Provisional Measures serve as a supplement to the provisions of the PRC Social Insurance Law.

Highlights:

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作者： 徐晓丹 金杜律师事务所劳动组

《在中国境内就业的外国人参加社会保险暂行办法》（“《暂行办法》”）已经于2011年9月6日由人力资源和社会保障部公布出台，并将于2011年10月15日起开始实施。该《暂行办法》针对2010年8月28日出台并于2011年7月1日实施的《中华人民共和国社会保险法》（“《社会保险法》”）中提出的在华就业的外国人应当参加社会保险的要求进行了具体规定，是对《社会保险法》的进一步补充。

要点如下：

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By Susan Ning, Sun Yiming and Liu Jia

Most recently, the hottest  topic on China's Anti-monopoly Law (AML) is a piece of news spreading on the internet, indicating that China Telecom, one of China's largest state-owned enterprises is under antitrust investigation conducted by a "relevant" competition authority for its suspected abuse of dominance in broadband market. If the abuse is successfully established, China Telecom may face huge fines under the AML. The news is also quoted by Xinhuanet.com, an authoritative website run by the government. However there has been no formal response from China Telecom or any competition authorities so far in this respect.

This article outlines details to do with China Telecom's conduct and examines whether or to what extent such conduct would be considered as an abuse of dominance and thus in violation of the AML.
 

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By Miao Qu of King & Wood's Intellectual Property  Group

This article continues to discuss Core Intellectual Property Issues in M&A and Investment. The first part of this article was published on Chinalawinsight on September 2011.

V. The Effect of the M&A on the IP Rights Agreements of the Acquiree

During the due diligence in a merger, special attention should be paid to the effect of the investment or merger on the intellectual property rights of the acquiree, especially the effect on license contracts. Two common problems are when the acquisition triggers a clause in a license contract changing control in a way that alters the effectiveness of the agreements, or some other clause in the agreements hinders future business of the acquired entity.

Case 5: A transnational company intended to purchase the domestic mobile communication department of another transnational company. During the due diligence investigations, we found a license contract between the acquiree and a state-owned enterprise ("SOE"). In this contract the acquiree licensed the core technology of the department to the SOE for exclusive use, and ensured that the core technology would not be transferred or licensed to any third party in specific locations. We contacted the management team of the acquiror and learned that the acquiror intended to transfer the technology to other domestic entities of the acquiror for implementation and management pursuant to its business framework. Therefore, we advised the acquirer that the acquiree should negotiate with the SOE to amend the license contract to ensure that the business could operate according to plan after the transaction.

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作者：瞿淼 金杜律师事务所知识产权组  

本文分两部分刊登， 2011年8月8日金杜法律博客（Chinalawinsight)刊登的了本文的第一部分。文章第二部分将继续对《投资并购交易中需要警惕的知识产权问题》进行解读。

五、并购行为对被收购方知识产权相关协议的影响

 在投资并购的尽职调查过程中，还需要特别注意投资及并购行为对一些知识产权权利可能产生的影响，尤其是对许可协议可能产生的影响。常见的情形有，收购导致触发控制权变更条款，从而可能影响协议的效力；或者协议原有的一些条款可能造成收购主体未来业务经营的妨碍。

案例五：某跨国公司拟整体收购另一跨国公司在中国境内的移动通讯业务部门。在尽职调查的过程中，我们发现被收购方曾与一国有企业签订一份许可协议，将该业务部门的核心技术许可该国有企业在中国进行排他性地使用，且承诺将不会将此技术在许可地域内转让或许可给任何第三方。知识产权律师应与收购方管理团队进行及时沟通，了解该公司的业务架构，明确收购方拟将收购获得的技术转让给收购方在中国的其它主体进行实施和管理。因此，应建议收购方在签署交易合同之前，由被收购方与被许可的国有企业协商修改许可协议，以保证交易后业务能够按计划运作。

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作者：尤杨、蔺楷毅 金杜律师事务所公司组

本文分两部分刊登， 2011年9月5日金杜法律博客（Chinalawinsight)刊登的了本文的第一部分。文章第二部分将继续对《房地产信托产品的风险概要》进行解读。

二、各类房地产信托产品的固有风险

尽管房地产信托产品种类繁多，但是各类信托产品都有其固有风险，这些风险与该类信托产品的特性紧密结合，根植于该类信托产品之中。例如：

1、以特定资产收益权为投资对象的信托计划

这类信托常与结构化信托相结合，典型的结构化特定资产收益权信托的模型是：信托公司与交易对手达成协议后，信托公司向公众募集资金并赋予其优先级受益权，并以募集来的资金收购项目公司的特定房地产项目的收益权。同时，项目公司的母公司或实际控制人将项目公司的股权转让与信托公司，并获得次级受益权，借此将房地产开发商的利益与优先级受益权人的利益进行绑定。在信托计划到期后，信托公司首先向优先级受益人分配信托利益，之后再向次级受益人分配剩余信托利益。

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By King & Wood's Trademark  Practice

The Tort Law of People's Republic of China was adopted on December 26, 2009, under which the IP rights, including copyrights, patent rights, and exclusive rights to use trademarks, are protected as individual rights and interests. Wang Shengming, vice-chairman of the Legislative Affairs Commission under NPC, commented, "Tort Law provides supplementary reference to the protection of IP rights."

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By: Gao Chunkai, He Yunfan and Li Lingxiao of King and Wood's Foreign Direct Investment Group

I. Background

On May 20, 2011, the State Administration of Foreign Exchange ("SAFE") issued the Circular of the SAFE on Operating Rules Concerning Financing and Round-Trip Investment Undertaken by Domestic Residents through Overseas Special-Purpose Vehicles (1)( "Circular 19" or "New Operating Rules"), which took effect on July 1, 2011. This Circular provides new operating rules for the foreign exchange registration with the SAFE of round-trip investments made through special-purpose vehicles ("SPV") and non-SPVs.

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作者：高醇恺、李凌霄和贺云帆 金杜律师事务所外商直接投资组

一、背景介绍

国家外汇管理局（“外管局”）于2011年5月20日颁布了《境内居民通过境外特殊目的公司融资及返程投资外汇管理操作规程》（1）（“19号文”或“新操作规程”），为特殊目的公司、非特殊目的公司返程投资相关的外汇登记提供了新的操作依据。

外管局曾于2005年10月21日颁布了《关于境内居民通过境外特殊目的公司融资及返程投资外汇管理有关问题的通知》（2）（“75号文”），之后外管局综合司先后于2005年、2007年和2009年颁布了《国家外汇管理局综合司关于下发<关于完善外债管理有关问题的通知>及<关于境内居民通过境外特殊目的公司融资及返程投资外汇管理有关问题的通知>操作规程的通知》（3）（“124号文”）、《国家外汇管理局综合司关于印发<国家外汇管理局关于境内居民通过境外特殊目的公司融资及返程投资外汇管理有关问题的通知>操作规程的通知》（4）（“106号文”）及《国家外汇管理局综合司关于印发<资本项目外汇管理业务操作规程（2009年版）>的通知》（5）（“77号文”，与124号文和106号文统称“旧操作规程”）。目前就境内居民通过境外特殊目的公司融资及返程投资相关的外汇事宜主要是适用77号文。

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金杜律师事务所破产、重组和清算组

     公司在进入重整程序之前处于正常运转状态，重整前的公司治理结构属于《公司法》上通常意义的公司治理结构。公司治理结构中包括几种关系：股东大会与董事会之间的信托关系；董事会和经理人员之间的委托代理关系；监事会与董事会和经理人员之间的监督与被监督关系。重整前的公司治理结构与重整中的治理结构存在较为明显的区别，主要特点是：1、公司最终控制权归属股东；2、股东利益至上；3、公司意思自治不受外界干预；债权人被排除在治理结构之外。
 

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By King & Wood's Trademark  Practice

The mark "日本電產" (Japan Densan in Chinese Characters) is also the short form of the enterprise name of its owner Nippon Densan Corporation (now Nidec Corporation). As a trade name, it is unique and distinctive. However, when being filed for registration as a trademark, "日本電產" ("Japan Densan in Chinese Characters") must also bear the distinctiveness that is required of a trademark.

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By King & Wood's Trademark  Practice

Nokia opposed a trademark application to register "VERTU" under Appn. No. 3084613 which covered "spectacles [optics]; eyeglass cases, etc." in Class 9 filed by an individual. Both the China Trademark Office ("CTMO") and Trademark Review and Adjudication Board ("TRAB") denied the opposition. Nokia appealed before the Beijing First Intermediate People's Court asserting that:

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金杜律师事务所融资组

自2009年7月跨境贸易人民币结算试点工作启动以来，相关业务的容量、复杂性及银行业务经历了飞速的发展。在2年的时间内，试点范围在20多个省(区、市)得以实施，中国人民银行计划在今年内将试点范围扩大至全国。为满足企业和银行对政策透明度的强烈需求，外汇管理局、商务部等监管当局已经颁布了一系列的规则和指引以促进人民币跨境业务。2011年6月8日，中国人民银行颁布了《中国人民银行关于明确跨境人民币业务相关问题的通知》(银发[2011]145号)(简称“通知”)。该《通知》从积极的角度阐明了与跨境人民币业务相关的若干重大问题。迄今为止，该《通知》被市场称为“实现人民币国际化的重大进步”。 

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By King & Wood's Banking Group

Since the launch of the pilot program of RMB settlement in cross-border trade transactions in July 2009, the volume and complexity of the said transactions and the ancillary banking businesses have been rapidly increasing. During the past two years, the pilot program was carried out in 20 provincial regions. PBOC plans to expand the pilot program to the whole country within this year. In order to satisfy business and banking industry's strong needs for policy transparency, regulatory authorities such as SAFE and MOFCOM have issued various rules and guidelines aiming to streamline cross-border flows of RMB. On June 8, 2011, PBOC published a most recent circular (1)("Circular") which clarifies several major issues relating to cross-border RMB transactions. Industry feedback regarding the Circular has been positive and the Circular has been interpreted as "a significant step towards the internationalization of RMB" by the market.

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Susan Ning and Yin Ranran

On September 2, 2011, China's Ministry of Commerce ("MOFCOM") released on its website the Provisional Rules on Assessment of Competitive Effects of Concentration of Business Operators (MOFCOM 2011 Announcement No. 55, the "Rules").  With 14 articles, the Rules elaborated on the factors to be considered by MOFCOM in assessing the competitive effects of a business concentration, which have been listed in Article 27 of the Anti-monopoly Law ("AML")¹ .  The Rules are implemented as of today (September 5, 2011).

The Rules set out the basic methodology for its competitive analysis and the basic elements for application of each factor in a merger review process.  The Rules appear to identify market share/market control power and market concentration levels as the most important factors to be considered by MOFCOM in assessment of competitive effects of a concentration.

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By Susan Ning, Huang Jing and Yin Ranran

On 25 August 2011, the Ministry of Commerce (MOFCOM) released the MOFCOM Rules for Implementation of Relevant Issues regarding National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (NSR Rules).  From 1 September 2011, the Rules replaces the MOFCOM Interim Rules for Implementation of Relevant Issues regarding National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (NSR Interim Rules) issued on 4 March 2011 (see our article entitled "MOFCOM issues national security review interim rules").

Compared with the Interim Rules, the key change we see in the NSR Rules is that MOFCOM clearly states that the authority will assess the applicability of the national security review (NSR) process from the substance and actual impact of a transaction; and that foreign investors shall not evade the NSR regime via alternative transaction structures, including but not limited to warehousing arrangements, trusts, multi-tier investments, leases, loans, contractual control, or offshore transactions, etc.

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作者：尤杨、蔺楷毅 金杜律师事务所公司组

房地产集合资金信托产品是指信托公司从多个委托人（也是“投资人”，相对于单一信托而言）处募集资金，用于与房地产公司合作开发房地产项目，获得收益后支付给委托人作为投资回报的信托计划，常见形式有特定资产收益型、股权投资型、贷款型以及复合型等。

一、各类房地产信托产品的共同风险

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作者：张毅 金杜律师事务所公司组

2011年8月25日，商务部公布了《商务部实施外国投资者并购境内企业安全审查制度的规定》（下称“规定”），并将于2011年9月1日正式实施。《规定》表示，凡属于上述安全审查范围的企业，外国投资者应向商务部提出并购安全审查申请。对属于并购安全审查范围的并购交易，由商务部在15个工作日内书面告知申请人，并在其后5个工作日内提请联席会议进行审查。《规定》还称，外国投资者不得以任何方式实质规避并购安全审查，包括但不限于代持、信托、多层次再投资、租赁、贷款、协议控制、境外交易等方式。

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By Zhang Yi of King & Wood's Corporate Group

On August 25, 2011, the Ministry of Commerce (MOFCOM) promulgated the Provisions on Implementation of Security Review System Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ( “Provisions”), which will become effective on September 1, 2011. The Provisions state that foreign investors must file an application for security review with MOFCOM for merger and acquisition (“M&A”) transactions that fall within the scope of security review. If a given M&A transaction is within the scope of security review, MOFCOM will inform foreign investors within 15 working days of the application being filed, and submit the application to the Joint Ministerial Panel for security review within 5 working days. The Provisions also state that foreign investors must not use any means, including but not limited to nominee shareholdings, trusts, multi-tier investments, leasing, loaning, control agreements, and offshore transactions, to evade M&A security review.

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