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Issue 45-September 2020 Veritas Update
Release date:
2020-09-22

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Issue 45-September 2020 Veritas Update6373637959927219007814880.pdf

Issue 45-September 2020 Veritas Update


CATALOG

Latest Hot Spot


Ministry of Commerce: Encouraging Items will be Added to the Foreign Investment Industries Catalogue


New Law Express


The Ministry of Commerce Promulgated the Measures on Handling Complaints from Foreign-invested Enterprises


Shanghai and Shenzhen Stock Exchange Issued Measures to Strengthen Supervision of Listed Companies


State Administration for Market Regulation Issued Regulations on Trade Secrets Protection (Draft for comments)


Our Firm’s Trend


Veritas Participated in the INTL 3E FAIR to Promote Foreigners Employment during Post COVID-19 Era



Latest Hot Spot


Ministry of Commerce: Encouraging Items will be Added to the Foreign Investment Industries Catalogue


At the launching ceremony of China International Fair for Investment and Trade on September 8 which has been held online (the 'CIFIT' on Cloud), the Vice Minister of Commerce said that the Ministry of Commerce has been accelerating the revision of the encouraging foreign investment industries catalogue, which will greatly increase the items of encouragement and support more foreign-invested enterprises to enjoy the relevant preferential policies.

The 'CIFIT' on Cloud is an important measure that China International Fair for Investment and Trade Organizing Committee adopted to actively respond to the impact of the COVID-19, to firmly implement the central government’s work deployment of foreign trade and foreign investment stabilization and the new requirement of 'Innovation of Exhibition Service Mode'. Through the cooperation with Alibaba group, we will upgrade the 'online CIFIT' which has been built and operated for 10 years, use new technologies, endow new contents, introduce new mechanisms and establish a new cloud-investment promotion platform - the 'CIFIT' on Cloud, which will integrate the online and offline mode, and provide a new look for the never ending 'CIFIT'.

Since 2020, the COVID-19 has been spreading globally, the world economy is in depression, protectionism and unilateralism are rising, the global market demand is insufficient, and thus international investment cooperation is facing a serious and complicated situation. The State Council has issued a series of policies and measures to stabilize foreign trade and foreign investment to help enterprises explore new opportunities from the crisis and open up new situations in the difficulties.

The relevant data shows that in the first seven months of 2020, the actual use of foreign capital reached RMB 535.6 billion, increasing 0.5% compared to the last year. The implementation of a number of major foreign investment projects were speeded up. In July, the actual use of foreign capital increased by 15.8% compared to the last year, and the positive growth of monthly foreign capital absorption lasts four consecutive months.

The Ministry of Commerce will continue to implement the Negative List of Foreign Investment Access, expand the scope of foreign investment support, and let more foreign-invested enterprises share China's market and opportunities. At the same time, the Ministry of Commerce will further establish and improve the foreign investment service system, help solve the difficulties and problems in the operation of foreign-invested enterprises, earnestly implement the foreign investment laws and its supporting regulations, and help create a stable, fair, transparent and predictable business environment. The Ministry of Commerce will promote the implementations of various policies and measures, establish new advantages of international cooperation and competition with a high level of opening to the outside world, and promote the formation of a new development pattern with the domestic cycle as a main body and domestic and international cycles promoting each other.


New Law Express


The Ministry of Commerce Promulgated the Measures on Handling Complaints from Foreign-invested Enterprises



Recently, the Ministry of Commerce has issued the Measures on Handling Complaints from Foreign-invested Enterprises (the Measures), which will be formally implemented on October 1, 2020.

The Measures is divided into five chapters with a total of 33 articles: general provisions, filing and acceptance of complaints, complaint handling, complaint management system and supplementary provisions. The general provisions stipulate the general requirements for the foreign investment complaint, clarify the scope of foreign investment complaint, and establish the hierarchical responsibility system for foreign investment complaint. The general provisions also provide the establishment and corresponding responsibilities of central and local organizations governing complaints, broaden the scope of complainants, and clarify the relationship between complaints and other relief channels. The second part is to provide a clear acceptance process and relevant rules and guidelines for complainants, make relevant provisions on the materials submitted by the complainants, entrusting others to make complaints, supplementary materials for complaints, and circumstances of rejection, and stipulate the notification obligations of the organizations governing complaints. The third part stipulates the relevant working principles of complaint coordination, clarifies the relevant obligations regarding cooperation and coordination of complainants and respondents, clarifies the methods of complaint coordination, strengthens the coordination of complaints, and promotes the coordination and settlement of complaints. In the part of complaint management system, detailed provisions are stipulated on the establishment of complaint file management, situation reporting, regular supervision, rights and interests protection proposal, etc., so as to strengthen the complaints information exchange between central and local governments, and strengthen the guidance and supervision of local complaint. The supplementary provisions mainly provide the application of investors from Hong Kong, Macao and Taiwan, the protection of the rights and interests of complainants, the interpretation of the provisions, and the effective date, which are in line with the Foreign Investment Law and its implementation regulations.

In conclusion, the Measures is an important part of China's new Foreign Investment Laws and the relevant regulations. By improving the working mechanism and system of foreign investors' complaints and timely promoting the settlement of severe issues put forward by foreign investors, the positive interactive relationship between the Chinese government and foreign investors will be more likely to be created, which will further boost our construction of a high-level, new and opening economic system and form the new advantages of international cooperation and competition.


Shanghai and Shenzhen Stock Exchange Issued Measures to Strengthen Supervision of Listed Companies


On September 4, 2020, the Shanghai Stock Exchange has started seeking public opinions on the ImplementationStandard of Disciplinary Actions Imposed on Listed Companies (the “Draft”) until September 18, 2020. The Draft combines the quantitative and qualitative standards, provides basic quantitative standards for common types of violations that could be defined by quantitative conditions, and makes qualitative definitions for violations that could not be defined by quantitative conditions.

On that same day, the Shenzhen Stock Exchange issued the Assessment Measures for Information Disclosure of Listed Companies (revised in 2020) (the “Assessment Measures”) , which will be implemented from the date of promulgation. According to the Assessment Measures, the information disclosure assessment results of listed companies are mainly based on the quality of information disclosure, which will combine with the operation of listed companies and the protection of investors' rights and interests. The assessment results are divided into four grades: A, B, C and D, from high to low.

Previously, the Shenzhen Stock Exchange issued the Administration Measures of Listed Companies Risk Classification (the “Administration Measures”) on August 30. There are 5 chapters and 16 articles in the Administration Measures, among which the No.7 to 9 articles in the second chapter stipulate the classification and rating standards in detail. Article No.13 and No.14 in Chapter 4 elaborate the differentiated supervision measures adopted for the different levels of listed companies. From the five aspects of financial fraud risk, operation risk, governance and operation risk, market risk and delisting risk, listed companies are divided into four levels: high-risk, secondary high-risk, concerned and normal. If the goodwill exceeds 50% of the net assets, or the controlling shareholders and the persons acting in concert pledge more than 80% of the shares, or carrying out concept speculation using hot topic, etc., will not be rated as normal.


State Administration for Market Regulation Issued Regulations on Trade Secrets Protection (Draft for comments)


In order to maintain the market order of fair competition and in line with the Law of the People's Republic of China Against Unfair Competition(the “Unfair Competition Law”), the State Administration for Market Regulation has issued the Regulations on Trade Secrets Protection (Draft for comments) (the “Draft”) on the 4 September on its official website, which clearly defines the definition of trade secrets, the acts of infringing trade secrets, the investigation and punishment on infringing trade secrets, and legal liabilities, etc regarding the important content of trade secrets protection.

 This Draft is a large-scale revision to the Regulation of the State Administration for Industry and Commerce on Prohibiting Infringement upon Trade Secrets, which came into effect in 1998. The Draft clarifies the core issues from four aspects regarding trade secrets involved in market competition. For example, this Draft explains the relevant concepts of trade secrets and their constituent elements referred to in Article No.9 of the Unfair Competition Law, which has been newly revised: it defines the concepts of trade secrets, technical information, operational information and business information; defines the three most important elements of trade secrets, which are 'not known to the public', 'commercial value' and 'taking corresponding confidentiality measures'; clarifies the owner, infringer as well as ownership of trade secret. In addition, there are a total of 13 articles specifying the law enforcement contents carried out by market regulation departments, which will not only facilitate the law enforcement practice at the local level, but will also effectively improve the supervision and enforcement ability of market regulation departments at all levels.


Our Firm’s Trend


Veritas Participated in the INTL 3E FAIR to Promote Foreigners Employment during Post COVID-19 Era


From September 12 to 13, 2020, Shanghai Veritas Law Corporation participated in the Employment, Entrepreneurship and Enterprise (3E) Fair organized by the Expatriate Center (TEC), jointly with its core team partners the AmCham, BenCham, CanCham, SingCham, Singapore Enterprise Center (SEC) and Ajinga. It's a non-profit and all-in-one event. The two-day event aims to meet the needs of the Shanghai community in the areas of Employment, Entrepreneurship and Enterprise. This integrated event has attracted many foreigners and local individuals, as well as international and domestic enterprises and institutions from leading industries in different fields.

Veritas participated in the stall setting process required by the 3E FAIR and a number of seminars and workshops held by the Fair to communicate with foreign and local job seekers. Veritas also discussed and exchanged ideas with other foreign and domestic enterprises concerning the employment issues arising from the post COVID-19 era. After the two-day Fair, Veritas will further utilize the online platform established by this Fair to attract more professionals, to establish cooperation with other enterprises, and to promote the employment market during the post COVID-19 era.


About Veritas

Shanghai Veritas Law Corporation is a comprehensive law corporation in China that provides perfect and comprehensive legal services to clients. With our professional skills and in-depth understanding of business, we provide a complete set of value-added legal service solutions for clients at home and abroad to help them achieve business goals.

We boast an excellent legal team paying close attention to client needs continuously, providing clients with practical solutions and pioneering professional advice. We strive to provide excellent services and take pride in establishing friendly and long-term partnership with our clients.

Through our international partners' offices in more than 20 cities including New York, Los Angeles, Singapore, Taiwan, Myanmar, Vietnam, Malaysia, India, Indonesia, Sri Lanka, Mexico, London and Oman, we are committed to providing professional services for Chinese enterprises to develop business in Asia, the United States, the Middle East, Latin America, the United Kingdom and other countries.