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By Susan Ning, Kate Peng and Li Rui

On May 29, 2013, the National Development and Reform Commission (“NDRC“) and the Civil Aviation Administration of China (“CAAC“) held a seminar discussing the potential issues in setting up an antimonopoly immunity scheme under Chinese Antimonopoly Law (“AML“). Chinese regulators and representatives from the International Air Transport Association (“IATA“) participated in the seminar and exchanged views on the antimonopoly review policy in the aviation industry and the possible outlooks of the contemplated immunity scheme. The immunity scheme under consideration, once came into effect, could have material effects on the cooperation between airlines operators.
Continue Reading Chinese Regulators Contemplate Antimonopoly Immunity Scheme for Airline Operators

By Susan Ning, Kate Peng and Xiao Dasha

The National State Administration of Industry and Commerce (“SAIC”) and the Ministry of Commerce (“MOFCOM”) recently appointed a new vice minister respectively. The newly appointed vice ministers shall supervise the antimonopoly division of the two authorities.Continue Reading MOFCOM and SAIC Appointed New Vice Ministers in Charge of Anti-Monopoly Division

by Dina Yin, Zhao Yan and Miao Jing King & Wood Mallesons’ Mergers & Acquisitions Group

PRC tax authorities have clarified, effective July 1, 2013, that oil and gas companies producing shale gas/coal bed methane (“CBM”) or service providers related to such production will be subject to a 17% VAT when providing labor services in relation to the production of shale gas or CBM.Continue Reading Shale Gas and CBM Companies to Pay VAT

By King & Wood Mallesons’ Compliance Group

With environmental pollution front and center in the Chinese press, the government in Beijing has moved to address at least one aspect of the problem – soil pollution. In a likely sign that new regulations on soil quality are on their way, the State Council recently issued a directive titled “Working Arrangement of the Recent Environmental Protection and Comprehensive Treatment of Soil.” Investors take note: the policies proposed by the Council will almost certainly impact existing and future investments in sectors such as manufacturing and heavy industry, as well as investments in geographic areas deemed to be ecologically sensitive.
Continue Reading Push For Soil Quality Regulations Will Have Consequences for Investors

By King & Wood Mallesons’ Banking & Finance Group

On 28 April 2013, SAFE promulgated the Administrative Measures for the Registration of Foreign Debt and an appendix thereto, the Operational Guidelines for the Registration of Foreign Debt (“New Rules on Foreign Debt”). Under the New Rules on Foreign Debt, borrowers are administered as three different groups: government finance agencies, banks, and non-bank borrowers. The New Rules on Foreign Debt have abolished some of the foreign debt approval requirements, clarified previous uncertainties in the practice of foreign debt registration and administration, and consolidated previous regulations on foreign debt registration and administration. The New Rules on Foreign Debt will come into effect on 13 March 2013.
Continue Reading SAFE’s New Rules Simplify Registration of Foreign Debt

By King & Wood Mallesons’ Healthcare Group

In April 2013, the Supreme People’s Court (“SPC”) issued the“Supreme People’s Court’s Annual Report of Intellectual Property Cases”, in which the SPC included 34 typical intellectual property and competition cases from 2012 and summed up 37 issues of application of law with universal significance. In this regard, we made a summary of the patent cases related to the pharmaceutical industry in the report, for the purpose of assisting pharmaceutical enterprises in drafting patent applications.
Continue Reading Insights on Drafting Pharmaceutical Patents from the “Supreme People’s Court’s Annual Report of Intellectual Property Cases”

By Dina Yin King & Wood Mallesons’ Mergers & Acquisitions Group

Last week on May 15, 2013, China’s State Council published a decision to further eliminate certain administrative examination and approval items《国务院关于取消和下放一批行政审批项目等事项的决定》(国发(2013)19号) (the “Decision”). According to the Decision, certain items (including projects, activities, organizations and other similar matters) which previously required central government approval now no longer require such approval.
Continue Reading MOFCOM Approval on Sino-Foreign Petroleum Contracts No Longer Required

ByTony Dong, Daisy Duan  and Jiang Junlu  King & Wood Mallesons Corporate Group

Over the years, it has been a common practice that multinational companies (“Home Entity”) dispatch expatriate employees (“Secondees”) to the affiliated enterprise in China (“Host Entity”) to hold post as senior management or other technical position. Usually, the Home Entity and the Secondees would retain the employment relationship and the Home Entity continues to pay the salaries and social security contribution for the Secondee in the home country, which would be reimbursed by the Host Entity. Since the tax clearance certificate issued by Chinese tax authority is required when the Host Entity makes remittance overseas for the reimbursement payment, the tax authority needs to determine whether the Home Entity constitutes the establishment/place of business (“taxable presence”) or permanent establishment (“PE”) under the relevant tax treaty under the secondment arrangement, which may result in PRC Enterprise Income Tax (“EIT”) consequence for the Home Entity. Nevertheless, there are often disagreements between tax authorities and the Host Entity due to the ambiguity of tax regulations in the assessment of taxable presence or PE under cross-border secondment arrangement, and consequently Host Entity has difficulty in obtaining the tax clearance certificates and cannot remit the payment to the overseas Home Entity. There will be a change from June 1st, 2013.
Continue Reading China Tax: Unveiling the International Secondment Arrangement

By King & Wood Mallesons’ Healthcare Group

On February 1, 2013, the Interpretation of Several Issues on the Application of Laws of Employment Disputes IV (the “Interpretation “) was promufgulated by the Supreme Court and implemented on the same day pursuant to Labor Law of People’s Republic of China, Employment Contract Law of People’s Republic of China, and Employment Dispute Mediation and Arbitration Law of People’s Republic of China and other relevant laws, regulations and civil practices. We hereby illustrate and analyze the Interpretation as follows for pharmaceutical companies’ information when dealing with employment issues, especially for the employment dispute, non-competitions, etc.
Continue Reading Executive Summary of the Interpretation of the Supreme Court on Several Issues on the Application of Laws of Employment Disputes IV

By King & Wood Mallesons’ Healthcare Group

On December 28, 2012, the Decision regarding the Modification of Employment Contract Law (the “Decision”) was passed by the 30th session of the Standing Committee of the 11th National People’s Congress, which will be implemented from July 1, 2013. This modification is relating to the labor dispatch part in the Employment Contract Law, which clearly expresses the qualification of the dispatch service providers, the administrative license for dispatch service, the “equal pay for equal work” of the dispatched employees and the position applying to the dispatch service.
Continue Reading Executive Summary of Modification of the Employment Contract Law by the Standing Committee of National People’s Congress