China Law Roundup: Trade Matters, Merger Review, Anti-Monopoly Law, Data Privacy, & More

For your reference, a roundup of recent China-focused advisories from leading global law firms, covering a broad range of corporate issues:

China Loses Raw Materials Case In World Trade Organization’s Appellate Body; Possible Implications For China’s Rare Earth Metals Quotas (King & Spalding)

“The World Trade Organization (‘WTO’) Appellate Body found that China’s export restrictions on a variety of raw materials violate WTO trade rules. The restrictions at issue limit China’s exports of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, and zinc. These products are used as inputs in the steel, aluminum, and chemicals industries… China will enter into negotiations with the complaining parties — the United States, the European Union, and Mexico — regarding how it will bring its measures into compliance with the Appellate Body’s report, bringing to a close this dispute that began in 2009.” Read the full update»

China Anti-Monopoly Law: What might we see in 2012? (Sheppard Mullin Richter & Hampton LLP)

Unlike other jurisdictions where antitrust enforcement is centralized, in China three agencies enforce the Chinese Anti-Monopoly Law (‘AML’). The Ministry of Commerce (‘MOFCOM’) handles mergers while cases related to anticompetitive conduct are split between the National Development and Reform Commission (‘NDRC’) and the State Administration for Industry and Commerce (‘SAIC’). The NDRC handles price-related violations and SAIC the non-price related violations. The AML has been in effect since August 2008 and continues to evolve as these three agencies adopt additional regulations in order to provide more guidance on and clarification of such aspects as terminology, procedures, and enforcement.” Read the full update»

China’s MOFCOM to Review Merger in Gas Market (McDermott Will & Emery)

“Recently, ENN Energy Holdings Limited and China Petroleum & Chemical Corporation jointly announced the acquisition of all outstanding shares in China Gas Holdings Limited.  This acquisition triggers a requirement to notify and obtain clearance from China’s Ministry of Commerce (MOFCOM).  Therefore, MOFCOM’s approval will be one of the preconditions for ENN Energy and Sinopec to close the transaction.” Read the full update»

China’s Online Data Privacy Rules Coming into Effect; Other Recent Data Privacy Developments in China (Morrison & Foerster LLP)

“China, like many jurisdictions, continues to grapple with the issue of whether and how to protect personal information in light of new technologies and services designed to collect and use personal information in new and different ways. An omnibus privacy law in China continues to be elusive but, as prior Morrison & Foerster alerts have reported, various government authorities in the People’s Republic of China, both at the central level and in some localities, are gradually putting in place laws and regulations in an attempt to address these new issues.” Read the full update»

USTR Requests “Credible Real World Cases” Of China Forced Technology Transfer; Outreach Seen As A Prelude To Chinese Vice President Xi Jinpeng’s February Visit To Washington (King & Spalding)

“The term ‘forced technology transfer’ describes the pressure to relinquish technology (including trade secrets) that is exerted by the Chinese government and Chinese companies on U.S. companies that seek market access in China, or as a pre-condition to performing certain operations there… Trade organizations including [the National Association of Manufacturers] and other business entities routinely raise Chinese forced technology transfer issues in annual filings to the Special 301 Committee, which is a USTR entity that reports on intellectual property concerns annually.” Read the full update»

Bridge to China: PM Harper’s Visit to China to Facilitate Canada-China Investment and Trade (Fraser Milner Casgrain LLP)

“Probably the signal accomplishment was the conclusion of substantive negotiations on the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA), an accord that has been in the works for the past 18 years and is expected to be among the strongest such agreements China has signed with foreign countries. Although the accord must still undergo internal approval processes in the two countries (including being presented to Parliament in Canada), the safeguards it provides for Canadian investors in China are significant.” Read the full update»

China Issues Its First Industry-Wide Plan To Promote Industrial Transformation And Upgrade Over The Next Five Years (King & Spalding)

“The State Council of China recently issued its first mid- and long-term plan for the entire industrial sector, the Industrial Transformation and Upgrade Plan (2011-2015). The Plan is an important step, and the highest level guideline, for the Chinese government to carry out the industrial development goals and tasks set out in China’s National Economic and Social Development 12th Five-Year Plan, covering the period 2011-2015.” Read the full update»

Does SEC Have New Methods for Reaching PRC Companies? (Loeb & Loeb LLP)

“A Washington, D.C., federal judge may have given the Securities and Exchange Commission a new tool to extend its reach to companies based in the People’s Republic of China. Magistrate Judge Deborah Robinson recently ordered Shanghai-based auditors Deloitte Touche Tohmatsu CPA Ltd. (DTT) to appear in court and ‘show cause’ why the firm should not be required to comply with an SEC subpoena seeking documents related to DTT’s former client, Longtop Financial Technologies Limited, a U.S. public company also based in the PRC and currently under SEC investigation for fraud.” Read the full update»

China’s New Foreign Investment Catalogue Comes into Effect (Morrison & Foerster LLP)

“The Catalogue represents relatively limited changes to its predecessor, issued in 2007. It reflects the planning priorities set forth in China’s 12th Five Year Plan, which was promulgated by the National People’s Congress in March, 2011, as well as the State Council’s Opinions on Further Improving the Utilization of Foreign Investment, issued April 2010, with liberalized foreign investment rules relevant to development of information technology, ‘clean’ technology, high technology manufacturing, and the service sector.” Read the full update»

Mickey Mouse Heads Overseas (Heenan Blaikie LLP)

“On the enforcement side, the Chinese Customs Agency investigates goods suspected of violating Chinese intellectual property laws, and can detain such infringing products. Despite these improvements, countries including Canada and the U.S. remain concerned about China’s ability to enforce IP rights. These concerns often revolve around copyright-protected products such as books, DVDs and software.” Read the full update»

New 2012 Updates to U.S. Free Trade Agreements Expected; No Progress With China (Sheppard Mullin Richter & Hampton LLP)

“Meanwhile, in November 2011, China updated its submission to accede to the WTO GPA, but the submission fell short of U.S. and E.U. expectations, setting extremely high dollar thresholds and exempting a large number of Chinese sub-central agencies and state-run enterprises. China … has been unable to make the kind of aggressive offers demanded by the international community to make its accession a reality. As such, for the time being at least, products made in China will continue to be noncompliant under the Trade Agreements Act.” Read the full update»


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