China Law Insight : China Business and Intellectual Property Lawyers & Attorneys : King & Wood Law Firm : IP, Arbitration, Litigation, Securities, Foreign Investment

Evasion or Negative Response
Regardless of the size of the dispute or the size of the Chinese company involved, some take an evasive attitude when confronted by overseas disputes, either failing to respond at all or hiring cheap and inexperienced foreign lawyers. This can put the Chinese parties at a severe disadvantage and it was a common situation at the beginning of the reform of investment laws in China. Now it occurs less frequently.

Instructing a foreign law firm to form the legal team
Currently, when dealing with complicated international disputes, many Chinese companies instruct large international firms as their key legal advisors. These firms in turn hire well-known local lawyers in third countries as and when needed. The advantage of doing things this way is that the legal team has enough experience and, when fully prepared, may have the power to persuade foreign courts and arbitrators, increasing the success rate of the Chinese companies involved.
However, this strategy leads to two common problems. First, fees are relatively high. Lawyers in foreign law firms generally charge high rates. Second, communication can be an issue. While there are no obstacles to communication between foreign firms and the corresponding foreign courts and arbitrators, communication between foreign firms and their Chinese clients may not be so effective. Different legal cultures and dispute resolution practices sometimes make it difficult for Chinese clients and foreign lawyers to fully understand one another.

Normally litigation lawyers at foreign firms do not understand Chinese and are often not very well acquainted with the commercial practices of Chinese companies. Chinese lawyers hired by international firms do not face language obstacles, but they may lack experience in complex international arbitration procedure. Because of this, Chinese clients often encounter difficulties establishing truly effective communication with their foreign counsel.

Hiring a Chinese law firm with experience in international litigation and arbitration to create an international legal team
This is a new combination whereby a Chinese company involved in an international litigation or arbitration proceeding hires, a Chinese law firm with experience in international litigation and arbitration to be responsible for building a global legal team. The advantages of this new strategy are the efficient use of fees and the increased efficiency of lawyer/client communications. As Chinese lawyers with international experience can read Chinese and directly draft in English, this saves on document translation costs. In addition, as Chinese lawyers understand the thoughts and concerns of Chinese clients, they can more effectively communicate with their Chinese clients. Moreover, key Chinese litigation lawyers with international experience are based in China rather than abroad. This makes meetings and day-to day communication with Chinese clients easier.
When facing commercial disputes abroad, particularly in the areas of foreign investment or production, hiring an internationally experienced firm of Chinese lawyers to lead foreign counsel and build an effective global team can be an excellent choice for Chinese clients.
 

Certainly, when clients choose a team led by Chinese lawyers, the lawyer’s understanding of English is not enough. The Chinese lawyer should:
 

• Have a depth of experience in foreign litigation and arbitration
• Understand the workings of international firms
• Understand the needs and concerns of Chinese clients
• Have a sizable team of its own in order to cope with a large number of tasks in a short period of time and in a variety of urgent situations

For an example of King & Wood’s experience leading a global team in complex multijurisdictional litigation, follow this link.

如何解决海外投资引起的跨国商业纠纷

近年来，中国企业的海外投资业务快速增长，尤以能源矿产、银行业、IT业和制造业等行业表现突出。2009年8月18日，中国石油化工集团公司宣布以约合72.4亿美元的价格成功收购总部位于瑞士的Addax石油公司，这是迄今为止我国公司进行海外资产收购最大的一笔成功交易。在此前的几年，中石油也进行了几次大的海外并购交易。例如，中国石油于2009年5月收购新加坡石油公司约45.51％的股份，交易对价约合10.2亿美元。另外，中国五矿集团公司、中国有色集团、宝钢集团、中国工商银行等企业也在对外投资方面大有作为。

随着中国企业对外投资的不断增长，商业争议时有发生。根据我们的经验，中国企业在应对海外争议案件方面大致存在以下几种模式：

一、逃避或消极应对

无论大小案件，也无论中国公司的规模大小，有些中国公司在应对海外商业争议案件时会采取逃避态度，不出庭或者找经验不足但收费低的外国律师去应对。这种做法通常都使得作为案件当事人的中国公司处于极为不利的境地。这种情况在对外开放的早期比较常见，近年来已经不常出现。

二、聘用境外事务所，由该外国所组建律师团

目前有不少的中国企业在应对复杂的海外争议案件时，倾向于聘用国际大型律师事务所作为其首席律师，再由该事务所视案件需要选聘其他国家的律师，组建律师团。这种模式的好处在于，这样的律师团通常具备足够的经验，而且如果准备充分，有能力去说服外国的法官或外国仲裁员，加大了中国公司在海外争议案件中胜诉的机会。

但实践证明，这种模式常存在两个方面的问题：第一是费用高昂。境外国际性律所事务所的律师费普遍比较高；第二是沟通问题，即尽管境外律师组成的律师团与境外的法院或境外仲裁机构的沟通没有障碍，他们与中国客户之间的沟通却往往不尽如人意。由于法律文化和争议解决途径方面的差异，中国客户与其聘请的境外律师有时候难以进行有效的沟通。

通常，境外律师事务所的有诉讼经验的律师不懂中文，对中国公司的商业做法也了解不多，而受聘于国际所的中国律师在语言上虽无障碍，却又往往欠缺海外诉讼仲裁程序的经验，因此中国客户常常感到与自己聘的境外律师进行有效的沟通比较困难。

三、聘用有国际诉讼仲裁经验的中国律师事务所，由该中国所组建律师团

这是一种新的组合方式，即中国企业在涉及境外的诉讼或仲裁程序时，聘请具有国际诉讼仲裁经验的中国律师事务所，再由该中国所根据案件的需要组建律师团。这一模式的优点是可以节约成本，并提高客户与律师间的沟通效率。因为有国际诉讼仲裁经验的中国律师可以阅读中文文件，并可以直接草拟英文文件，这样就节约了相当的法律文件的翻译成本。另外，中国律师比较了解中国客户的想法和担心，因而可以高效地跟客户进行沟通。并且，中国的有国际经验的诉讼律师就在国内，比远在外国的国际诉讼律师更方便与中国客户沟通。

因此，对中国公司而言，在面对跨境商业争议（尤其是海外投资、生产引起的商业争议）时，聘请有丰富国际诉讼仲裁经验的中国律师，由这样的中国律师负责组建并引领包括境外律师在内的律师团，不失为一种理想的选择。

当然，如中国客户拟遵循本模式，聘请中国律师来组建律师团，则这样的中国律师仅仅懂英文是远远不够的。能够胜任本模式下角色的中国律师必须：

• 拥有丰富国际诉讼仲裁经验；
• 了解境外律师事务所的运作；
• 了解中国客户的需求和担心；
• 有相当规模的团队，能够应对短时间内的大量任务以及各种突发情况。

请点击本链接，以了解金杜在引领国际律师团队解决复杂的跨司法区域争议方面的案例。

Previously, regulatory requirements with regard to offshore lending were mainly found in the 2004 SAFE Notice on Certain Issues Relating to Internal Management of Foreign Currency Funds by the Multinational Companies (the “2004 Notice”). The purpose of the 2004 Notice was to optimize the allocation of foreign currency funds and to facilitate the utilization of foreign currency inter- company loans between members of multinational companies headquartered in the PRC. In accordance with Clause 23 of the new Notice, if there is any inconsistency between the 2004 Notice and the new Notice, the new Notice shall prevail. We set out below an introduction on the key features of the Notice and its relevant provisions.

Key Features of the Notice

1. Lender and Borrower under an Offshore Lending
In accordance with the Notice, eligible domestic enterprises of any type would be permitted to provide foreign currency loans to their wholly owned subsidiaries or for the equity of enterprises legally incorporated offshore.

2. Qualification Requirements for Offshore Lending
The requirements set out in the Notice for offshore lending by domestic enterprises to their offshore wholly-owned subsidiaries or equity interests include: Both the lender and the borrower have been legally incorporated with fully paid-up registered capitals; All foreign direct investment projects of the lender in the past years have been verified by the regulatory authorities in charge of foreign investments and filed with SAFE under foreign exchange registrations, and the lender (incorporated and existing for more than one year) has gained a second (or above)-grade ranking in the latest joint annual inspection of foreign investments, etc.

3. Forms of Offshore Lending
The forms of offshore lending as provided in the Notice are as follows:
(1) Direct lending, namely the domestic enterprise extends loan facilities directly to its wholly-owned subsidiaries or equity interests legally incorporated offshore;
(2) Entrustment loans, namely lending in the form of entrustment loans through a designated foreign exchange bank or the finance company of an enterprises group duly incorporated and qualified to conduct foreign exchange business.

4. Lending Threshold
The Notice supervises the offshore lending outstanding balance amount, and provides that the outstanding balance of a lender's offshore lending shall be limited to the lower of: (i) 30% of the lender's owner equity, and (ii) the duly registered investment amount of the Chinese party as agreed.

5. Verification of Outbound Remittance of Funds
The Notice simplifies the verification procedure of outbound remittance of foreign exchange funds. Subject to the verified offshore lending threshold and the effective term of lending, domestic enterprises engaged in offshore lending are permitted to re-lend the funds that have been repaid without the need to obtain SAFE verification for each of the loans.

6. Sources of Funds for Lending
The sources of funds for offshore lending as provided in the Notice have been expanded to not only include the self-owned foreign currency funds of the lender (as provided in the 2004 Notice), but also includes foreign currency funds converted from RMB funds and the funds in the foreign exchange capital pool as verified by SAFE.

7. The Income and Payment Scope of the Special Account for Lending
Compared to the 2004 Notice, the Notice has enlarged the income and payment scope of the Special Account for Lending.

8. Domestic Transfer of Funds
The Notice simplifies the verification procedure for domestic transfer of funds under offshore lending. Except for the outbound remittance of funds under the offshore lending from the Special Account for Lending and the inbound remittance of funds for repayment of principal and interest or enforcement of security to the Special Account for Lending, other domestic transfers of funds between the relevant foreign exchange accounts and the Special Account for Lending would not be subject to verification by the local SAFE. The lender may proceed with such transfer with the designated foreign exchange bank by presenting the relevant verification documents in respect of the offshore lending.

9. Statistical Monitoring and Risk Precaution under Offshore Lending
The Notice improves the statistical monitoring and risk precaution mechanism under offshore lending. For example, matters such as the verification of the offshore lending threshold, the opening of the Special Account for Lending, the domestic transfer of foreign exchange capital and the outbound and inbound remittance are supervised under the SAFE foreign exchange administration information system for foreign direct investments. Meanwhile, the Notice provides SAFE with the discretion to make timely adjustments to the qualification requirements for offshore lending, the sources of funds, the amount and the term of the lending etc., according to the balance of payments and the development in the offshore lending business.
 

Conclusion
Compared to the 2004 Notice, the Notice has reduced the qualification requirements for offshore lending, expanded the sources of funds, and simplified the verification and remittance procedure for offshore lending. Currently, domestic enterprises have achieved great success in their offshore investments. However, the difficulty in obtaining financing offshore and the shortage of floating capital has been an obstacle to the further developments of offshore Chinese funded enterprises. The issue of the Notice would encourage more Chinese enterprises with strong capital strength to “go abroad”, further facilitate investment and trading so as to stabilize the offshore demands and to deal with the international financial crisis in an effective way.

背景
为解决已“走出去”的境外中资企业在境外融资难和流动资金不足的问题，支持更
多有资金实力的企业“走出去”，提高境内企业的资金使用效率，国家外汇管理局（以
下简称“外管局”）于2009 年6 月9 日发布了《关于境内企业境外放款外汇管理有关问
题的通知》（以下简称“《通知》”），并将于2009 年8 月1 日起开始实施。
《通知》发布以前，与境外放款有关的外汇管理方面的规定主要为外管局于2004
年10 月18 日颁布的《国家外汇管理局关于跨国公司外汇资金内部运营管理有关问题
的通知》（以下简称“汇发【2004】104 号文”）。汇发【2004】104 号文旨在优化外汇
资源配置，便利和支持总部设在中国的跨国公司成员之间进行外汇资金的拆放。根据
《通知》第23 条的规定，汇发【2004】104 号文中涉及境外放款的外汇管理条款与
《通知》有冲突的，以《通知》为准。
我们将在下文介绍《通知》的主要特征及其相关规定。本简报旨在做出一般性的
指引，而不构成对某一特定案例的具体意见。
《通知》的主要特征
一、境外放款的主体和对象
根据《通知》的规定，只要符合一定条件，任何类型的境内企业均可为其在境外合法
设立的全资附属企业或参股企业发放外汇贷款。
二、境外放款的资格条件
《通知》规定的境内企业向其境外全资附属企业或参股企业放款的条件包括：放款人
和借款人均依法注册成立，且注册资本均已足额到位；放款人历年的境外直接投资项
目均经国内境外投资主管部门核准并在外管局办理外汇登记手续，且参加最近一次境
外投资联合年检评级为二级以上（成立不足一年的除外）等。
三、放款形式
《通知》规定的境外放款形式有：
（1）直接放款，即由境内企业直接向其境外合法设立的全资附属企业或参股企业提供
放款；
（2）委托贷款：即通过外汇指定银行或经批准设立并具有外汇业务资格的企业集团财
务公司以委托贷款的方式进行放款。
四、放款额度
《通知》对境外放款实行余额管理，并规定放款人的境外放款余额不得超过其所有者
权益的30%，同时不得超过借款人已办妥相关登记手续的中方协议投资额，以低者为
限。
五、资金汇出的核准
《通知》简化了外汇资金汇出的核准手续，在核准的境外放款额度和有效期内，从事
境外放款的境内企业可将已回收的境外放款额度循环使用，而无需就每次放款单独取
得当地外管局的核准。
六、放款的资金来源
《通知》规定的放款资金来源由汇发【2004】104 号文的自有外汇资金扩大到企业
的自有外汇资金、人民币购汇资金以及经外管局核准的外币资金池资金。
七、放款专用账户的收支范围
《通知》在汇发【2004】104 号文的基础上扩大了境外放款专用账户的收支范围。
八、放款资金的境内划转
《通知》简化了境外放款所涉及的境内划转核准手续，除放款资金由境外放款专用
账户汇出境外或还本付息、担保履约等资金由境外汇入境外放款专用账户需当地外
管局核准外，资金在境内相关外汇账户与境外放款专用账户之间的划转，放款人可
持境外放款核准文件等到外汇指定银行直接办理，无需当地外管局的另行核准。
九、境外放款的统计监测与风险防范
《通知》完善了境外放款的统计监测与风险防范机制，主要体现在：将境外放款的
额度核准、境外放款专用账户、境内外汇资金划转以及汇出、汇入等纳入国家外管
局直接投资外汇管理信息系统；设定了国家外管局可以根据我国国际收支形势和境
外放款情况，对境内企业放款资格条件、来源、数量以及期限等进行适时调整的保
障条款。
总结
相较汇发【2004】104 号文，《通知》在保证风险可控的前提下，最大程度地
降低了放款人的资质门槛，对资金来源明显放宽，同时简化了境外放款的核准
和汇兑手续。目前我国境外投资取得了积极成效，但境外融资难和流动资金不
足的问题一直影响了境外中资企业的进一步发展壮大。《通知》的及时出台将
有利于支持更多有资金实力的企业“走出去”，进一步促进投资贸易便利化，
以稳定外需，更好地应对国际金融危机。