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By King & Wood’s Finance Group

After seeking public comments in a wide range and holding several times discussions with bankers and lawyers, on 9th October 2011 CBRC promulgated the Rules on the Distribution of the Wealth Management Products of the Commercial Banks ("CBRC Rules"). The CBRC Rules maintains major content of the Interim Rules on the Commercial Bank’s Wealth Management Business to the Individuals and the Guidelines on Risk Management on the Commercial Bank’s Wealth Management Business to the Individuals in 2005, at the same time, CBRC Rules provides new requirements in key fields. In the current banking market, the funds is seriously short, and the interest rates for the deposit are very low and the means of investment are very limited, therefore, banks and their clients will pay much more attention to the sales of the wealth management products.Continue Reading CBRC New Rules on the Sales of Wealth Management Product by Commercial Banks

By Zhang Shouzhi Li Xiang and Zhang Mei King and Wood’s International Trade  Group

As the third-largest trading nation in the world, China’s import and export volume increases significantly year by year, among which, certain percentage of transactions relates to import and export of large-sized complete set equipment. Compared with common commodity trading, large-sized complete set equipment trading are much more complicated, involving commercial, technical, legal and financial issues relating to not only commodity trade but also intellectual property protection and services. In addition, large-sized complete set equipment are normally expensive amounting to tens and even hundreds of millions of dollars and such equipment can be crucial for the production and business operation of an enterprise. Thus, any disputes if not resolved successfully may lead serious consequences.Continue Reading Legal Issues in Contracts for Sale of Large-sized Complete Set Equipment （Part I of II）

By King & Wood’s Trademark  Practice

Trademarks should be registered wherever the products that carry those trademarks go. This has become a motto for exporters in Yixing. According to preliminary statistics conducted by local authorities, over 200 trademarks have been registered abroad, and the number of such trademark owners increase from 10 to more than 20 in Yixing.Continue Reading Yixing: Over 200 Trademarks Registered Abroad

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.Continue Reading Not Your Average Assignment of Contracts: New Provisional Measures Governing Transfers of Insurance Business

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.Continue Reading LV is not Well-Known?

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: 

     Case numbers
 		  
  Year Cleared without conditions  Cleared with conditions 

Rejected
 
2008                           16                          1         0
2009                           75                         4        1
2010                           116                         1        0

 Continue Reading MOFCOM Revealed Yearly Merger Control Statistics

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").Continue Reading MOFCOM to Promulgate Three New Rules on Merger Control

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:Continue Reading Shared Benefit or Shared Burden? Provisional Measures on Social Insurance for Foreigners Working in China

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.
 Continue Reading Chinese Antitrust Enforcement Agencies Ready to Show Teeth to Large State-owned Enterprises?

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.Continue Reading Core Intellectual Property Issues in M&A and Investment （Part II of II）