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By  Scott Farrell  King&Wood Mallesons’ Sydney Office

Scott Farrell On 18 November 2014, the Chinese government announced that the Bank of China would be the clearing bank for the Chinese currency, Renminbi (RMB), in Sydney. Having an RMB clearing bank in Sydney presents a tremendous opportunity for Australian businesses, whether they are involved in financial services or not. We set out what it means by answering a few simple questions.

Q: Was an RMB clearing bank required to make RMB payments in Australia?

A: No. Payments in RMB can already be made in Australia, either though the RMB denominated accounts held with banks, or through Australia’s RMB settlement system (see below). However, a local RMB clearing bank makes the use of RMB for payments easier, particularly for larger amounts.
Continue Reading What does a Sydney RMB clearing bank mean?

By Mark Schaub  King & Wood Mallesons’ M&A Group

肖马克The CBRC has issued on 20 January 2015 The Notice on the Promotion Guidelines for banking applications of secure and controllable information technology (2014-2015) (“CBRC Guidelines”). The CBRC Guidelines has immediately set off a panic amongst financial institutions operating in PRC and software/hardware/service vendors. The CBRC Guidelines require banks to use “secure and controllable” IT, but many foreign invested financial institutions and vendors are concerned that the guidelines are a large incremental step in an on-going trend aimed at their exclusion from the Chinese market.
Continue Reading Securing China’s Banking IT – CBRC Makes Life Much Tougher for MNC Vendors

By Susan Ning, Kate Peng and Lingbo Wei  King & Wood Mallesons’ Antitrust Group

NING, Susan (Xuanfeng)彭荷月On 10 February 2015, the NDRC announced its decision in relation to the abuse of dominance investigation into Qualcomm. Following the announcement, the NDRC held a press conference and revealed more details about the case.

According to Mr. Xu Kunlin, the Director General of the Anti-monopoly Bureau of the NDRC, two US companies filed a complaint to the NDRC about Qualcomm’s alleged abuse of dominance in 2009. In November 2013, the NDRC initiated an investigation into Qualcomm and conducted a dawn raid at Qualcomm’s Beijing and Shanghai offices in the same month. It is reported that during the proceedings, Qualcomm delegates had made 28 visits to the NDRC. Mr. Xu personally attended 8 of those visits. Finally, yesterday the NDRC announced its decision, imposing a fine of RMB 6.088 billion (approximately USD 975 million).  The fine is the largest in China’s corporate history, outnumbering all fines imposed by the NDRC in 2014 (RMB 1.8 billion in total) by more than double.  In addition to the fine, Qualcomm has made commitments to the NDRC to take several rectification measures.

According to press releases, Mr. Xu indicated that the full text of the decision will be published in the coming days.Continue Reading Qualcomm Investigation Finally Closed: Some Changes in Business Model in Addition to an RMB 6.088 Billion Fine

By Wang Rui and Xiao Yu   King & Wood Mallesons’ M&A Group

In 2014, the Ministry of Industry and Information Technology (“MIIT”) and Shanghai Municipal Government issued a series of regulations in relation to opening up value-added telecommunication services to foreign investments within the Shanghai Free Trade Zone[1].  According to these regulations, the restrictions on foreign investments in seven categories of value-added telecommunication services[2], which were listed under the current Classification Catalogue of Telecommunication Services[3] (“Classification Catalogue of Telecommunication Services (2003)”), have been relaxed to different degrees[4].  Among which, the percentage cap on foreign equity ownership of companies providing “Online Data Processing and Transaction Processing Services (Operating E-commerce)” has been lifted from 50% to 55%.  Meanwhile, the approval and establishment process for foreign invested telecommunication enterprises have been substantially simplified in the Shanghai Free Trade Zone[5], and such enterprises are permitted to provide relevant value-added telecommunication services on a nationwide basis[6].
Continue Reading Foreign Equity Ratios In Operating E-commerce Business Platform Can Reach 100%

By king & Wood Mallesons’ Compliance Group

In order to strengthen the supervision of food safety in China, the National People’s Congress published the “People’s Republic of China Food Safety Law (Revised Amendment)” (“First Revised Amendment”) for public comment on its official website in June 2014. Earlier, in October 2013, the “People’s Republic of China Food Safety Law (Amendment)” (“Amendment”) was published for comment by the State Council. Based on views of the members of the National People’s Congress, the “People’s Republic of China Food Safety Law (The Second Revised Amendment)” (“Second Revised Amendment”) was published in December 2014. Compared to the First Revised Amendment, mainly drafted by the government, the Second Revised Amendment incorporates public views and suggestions. As a result, the Second Revised Amendment is more considerate towards consumer rights and operators’ behavior. This newsletter reviews the highlights of the three Amendments to the People’s Republic of China Food Safety Law and discusses the new provisions of the Second Revised Amendment.
Continue Reading The Second Revised Amendment of the Strictest Food Safety Law in History

By Xu Ping Mark Schaub and Jennifer Yao King & Wood Mallesons’ M&A Group

xu_pingschaub_mOn 19 January 2015, the Ministry of Commerce of the PRC (“MOFCOM”) published a discussion draft of the proposed new Foreign Investment Law (“Draft FIL”) on its official website for public comments. As part of a trend of transforming the role of government in the economy and simplifying red tape, this new legislation will revamp how China interacts with foreign investment which has been long-awaited.

China is not the same country when the Sino-foreign Equity Joint Venture Enterprise Law was promulgated in 1979. In addition to its rapid growth and developing economy, there has been in recent years strong and sustained growth in outbound investments by Chinese enterprises. This has led to China changing from a net capital inflow country to a net capital outflow country in 2014. No doubt China’s perspectives and strategies on both inbound and outbound investment regime have reshaped dramatically reflecting the changing economic landscape.
Continue Reading A New Era for the PRC Foreign Investment Regime —— An Introduction to the Discussion Draft Foreign Investment Law of PRC

By Paul Starr  King & Wood Mallesons’ Dispute Resolution Group

starr_pOver the last several years, Chinese companies have been extending their reach around the globe, undertaking ever-increasing pioneering projects in infrastructure, energy, commerce, environment and other developments.

As they do so, we see a growing number of multi-million dollar disputes arising from their overseas businesses and claims incurred by their overseas counterparts. The legal risks to which Chinese companies are exposed have therefore been increasing. Some of them, rather unwittingly, develop a habit of turning to local lawyers in the dispute countries (“Country Lawyers”) for major dispute resolution solutions. That is very inadvisable.
Continue Reading International Arbitration outside of the PRC: Explaining to Chinese Enterprises why they need us

By Barbara Chiu    King & Wood Mallesons Dispute Resolution Group

chiu_bThe Securities and Futures Ordinance (Cap. 571) (“SFO”) regulates the securities and futures market in Hong Kong, and provides a comprehensive civil and criminal regime to address misconduct in the financial market. In addition, sections 40 (Civil liability for misstatements in prospectus) and 40A (Criminal liability for misstatements in prospectus) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (“CWUMPO”) also impose civil and criminal sanctions for misstatements made in a prospectus for the protection of public investors.
Continue Reading Key regulations on the disclosure of false or misleading information / misstatements in prospectus in Hong Kong

By King & Wood Mallesons’ Compliance Group

On March 7th, 2014, the State Council issued the Regulation on the Supervision and Administration of Medical Devices (“Regulation”). On July 30th, 2014, China Food and Drug Administration issued the Measures for the Management, Supervision and Administration over Retail of Medical Devices (“Measure”). On December 12th, 2014, China Food and Drug Administration issued the Standards for Quality Control of Medical Devices (“Standard”). The series of regulatory actions demonstrates China’s efforts to strengthen administration of manufacturers and retailers of medical devices and equipment.
Continue Reading Medical Devices production enterprises are facing higher supervision

By Mia Qu and Sally Wang     King & Wood Mallesons’ IP Litigation Group

qu_miaoAccording to the data of Chinese e-Commerce Research Center, by the end of 2012, the trading volumes of e-commerce market in China had reached 7.85 trillion. In 2013, it was 10.5 trillion and is expected to reach 13.4 trillion in 2014. From the industry distribution of e-commerce websites, the top ten industries are: apparel, textile, agriculture and farming, digital household appliances, machinery and equipment, chemicals and plastics, food and wine, construction materials, hardware and tools, medical treatment and medicine. Along with this phenomenon, the protection of intellectual property rights in the online sphere is also facing a whole new series of challenges. This article will focus on the discussion of issues of trademark infringement in e-commerce.
Continue Reading Common Issues of Trademark Infringement in e-Commerce and Enforcement