The Ministry of Commerce of the People’s Republic of China (“MOFCOM”) made the decision to prohibit the proposed acquisition of China Huiyuan Juice Group Limited by the Coca-Cola Company (the “Transaction”) under Article 28 of the Anti-Monopoly Law of People’s Republic of China (the “AML’). We believe the following three negative influences on competition were the primary considerations taken into account by MOFCOM:
Susan Ning, Partner, International Trade
By Xu Ping & Mark Schaub King & Wood’s Foreign Direct Investment Practice
China’s Ministry of Commerce (MOFCOM) has recently issued a number of notices delegating approval competency to lower governmental levels. This delegation of approval competency to local authorities will greatly accelerate the approval process for foreign invested projects. Two prominent areas in this general policy of devolution are delegation of approval authority over (i) foreign invested holding companies and (ii) foreign invested venture capital enterprises (“FIVCEs”) as well as foreign invested venture capital management enterprises (“FIVCE Management Firm”).
Often, when Chinese lawyers deal with foreign-related cases they see the term "attorney-client privilege" in the foreign lawyer issued legal opinions and memorandums. Furthermore, many foreign lawyers would like to know if their communication with the Chinese lawyers they work with is provided the same amount of protection as their communication with their clients.
Black’s Law Dictionary defines attorney-client privilege as a client’s right to refuse to disclose, and to prevent anyone else from disclosing, confidential communications between him or her and his or her attorney. This privilege prevents attorneys from disclosing their communications with their clients. Furthermore, this protection prevents any other party, including, the attorney from using any information that could be considered "attorney-client privilege" as evidence in a litigation. However, there are exceptions. For example, an attorney has a duty to disclose privileged information if the disclosure is related to criminal activities. The attorney-client privilege was established to encourage honest communication between an attorney and his or her clients. This opportunity for honest communication will reduce the chance that a client will intentionally or unintentionally engage in an illegal activity due to ineffective communication with his or her attorney.
Gui Hongxia and Li Xiang of King & Wood’s Dispute Resolution Group
Continue Reading Attorney-client Privilege: Extended to Foreign Lawyers in China?
By Mark Schaub King & Wood Mallesons’ FDI Group
According to Chinese media reports last year, six children died and nearly 300,000 others were sickened after consuming milk powder containing melamine, a toxic industrial chemical that was added to show a higher protein level in the milk powder. The melamine contamination of dairy products was discovered to be widespread. Concerns about food safety have surfaced in China long before the melamine dairy scare: sub-standard baby milk produced in Anhui, Longkou noodles containing lead from Shandong, fake alcohol in Guangdong, soy sauce made from human hair (still not clear how that works in practice), eggs with melamine – this list is long and a cause of grave concern to Chinese consumers. Continue Reading PRC Food Safety Law: Food for Thought
By Mark Schaub, Feng Xin, Duncan Hwang King & Wood’s Foreign Direct Investment Practice
A. General Devolution to Lower Levels
China’s Ministry of Commerce (MOFCOM) has continued their trend of further delegating approval competency to lower governmental levels. This delegation of approval competency to local authorities will greatly accelerate the approval process for foreign invested pr
Mia Qu/Melody Shi/Nick Wang of King & Wood’s Patents Practice
The third amendment of the Patent Law of the People’s Republic of China (“New Patent Law”) was passed on December 27th 2008, and will come into effect on October 1st 2009. The New Patent Law will impact the legal administration of and court rulings on patents as follows: Continue Reading Impact of the New China Patent Law
Ariel Ye, Dong Ping, and Yang Weiguo of King & Wood’s Cross-border Dispute Resolution Practice
On Monday 23 February 2009, the Tribunal de Grande Instance of Paris in France heard an urgent application by a team of Chinese lawyers for an injunction to prevent the auction by Christie’s of two controversial ancient Chinese relics. It was not in dispute that the two bronze sculptures, one of a rat’s head and another of a rabbit’s head, had been looted by Anglo-French troops from the Old Summer Palace in Beijing during the Second Opium War in 1860 and had until recently been part of the collection of the late Yves Saint Laurent. The Tribunal nevertheless rejected the application. Subsequently, on Wednesday 25 February 2009, the sculptures were auctioned off for 14 million euros each to then-anonymous telephone bidders. The controversy is ongoing.
Continue Reading China’s Lost Treasures: Retrieval of Looted Cultural Relics
In the year following the entry into effect of the PRC Enterprise Income Tax Law, the Chinese tax authorities have issued several rules clarifying emphasizing the position on withholding tax on China-sourced income of non-resident enterprises. Recently, a new regulation was issued that sets out the procedural rules for withholding income tax, the Provisional Administrative Measures on Withholding Enterprise Income Tax for Non-resident Enterprises, Guoshuifa [2009] No. 3.
Stephen Nelson, Partner & Alice Zhang, Taxation
Continue Reading China Takes Action on Non-resident Enterprises Withholding
Wang Rui, Partner, International Trade
The Chinese legislature created a hybrid from the different approaches adopted by civil and common law jurisdictions through the Copyright Law of the People’s Republic of China (the “Copyright Law”) and the Regulations on the Implementation of the Copyright Law of the People’s Republic of China (the“Implementation Regulations”), and produced the twin concepts of “legal entity work” and “occupational work” for assigning rights to works made in the course of an employment relationship. For example, a book written by a group of employees organized by an entertainment company for celebrating the company’s anniversary would likely be considered “legal entity work”, but a piece of music composed by a composer employee (not for specific purposes) is “occupational work”, because in the former case, supervision of the company would be involved but the latter case it would not. Continue Reading Copyright Due Diligence Investigations in China: Legal Entity Work or Occupational Work?
The pass-through tax treatment for partnership enterprises has finally been officially confirmed by the PRC tax authority, via the Circular on the Issues Concerning the Income Tax of the Partners in Partnership Enterprises, Caishui [2008] No. 159, which took effect retroactively as of January 1, 2008. It represents an important first step in the development of Chinese partnership tax law.
Stephen Nelson, Partner, and Alice Zhang, Taxation
Continue Reading PRC Confirms Pass-through as “Allocate First, Then Tax”