A Preview of China’s New Anti-Monopoly Law

By Ron Cai and Jim H. Young
[November 2007]

The new Anti-Monopoly Law of the People’s Republic of China (the “AML” or the “Law”) adopted by China’s National People’s Congress on Aug. 30, 2007 will become effective on Aug. 1, 2008. Importantly, under the Law, any foreign or domestic company with more than one-tenth share of any given product market or territorial market, based on a number of “dominant market status” criteria, can be presumed to possess the dominant market status, with the burden of proving otherwise placed upon the company.

While it is not yet known exactly how the AML will be implemented and enforced, or even which governmental authority will enforce it, foreign companies that merge with or acquire companies in China should be aware of the AML’s potential implications, which may be substantial, since any merger and acquisition (M&A) transaction that increases the size of a company can be under scrutiny. Distribution arrangements will see increased scrutiny under the AML, and businesses must be more careful of pricing arrangements with distributors, since the Law introduces “monopoly agreement” and “abuse of dominance” language that can affect distribution agreements.

Companies with intellectual property interests should also stay abreast of the Law’s implication. Under the existing law, the interaction between intellectual-property protection and restriction of competition is not well depicted. In comparison, the AML has looked more closely at the issue that some entities may use their intellectual property rights to improperly enhance their market dominance.

The AML mainly deals with (1) monopoly agreements, (2) abusive market dominance, (3) concentration activities, and (4) abusive governmental or administrative conduct. The AML provides some quite detailed procedures that a new, yet to be designated, anti-monopoly law-enforcement agency under the State Council (the “Agency”) will be required to follow when conducting investigations of potential violations. Under the Law, businesses may both be liable for administrative penalties for violation of the AML and be subject to civil liabilities to third parties who suffer as a result of the monopolistic conduct at issue.¹

The following analysis of the AML summarizes the major provisions of the Law and their impacts on business activities in China.

Applicability of the AML

The fundamental purpose of the AML is to deter the monopolistic conduct of “business operators.” For the purposes of the AML, a business operator is defined as “any natural person, legal person, or any other organization” engaged in the production or distribution of goods or the provision of services.² Article 7 of the AML provides that industries or business operators “controlled by the State-owned economy” shall not harm consumer interests by taking advantage of their controlling or exclusive dealing status. The AML appears to apply equally to privately owned entities and to entities owned or otherwise controlled by the Chinese government.

Article 2 of the AML provides that the Law applies to all monopolistic business activities that occur within China and to those that occur outside of China, but cause anti-competitive effects within the country. Thus, multinational enterprises with branches or subsidiaries in China may need to take special heed under the Law because even activities outside of China (such as those in connection with technology licensing and M&A transactions) can fall within the reach of the AML.

For China’s national interests, the AML does not apply to concerted actions of agricultural producers or rural economic organizations involved in economic activities.³

Monopoly agreements

“Monopoly agreements,” unless exempted under the AML, are subject to scrutiny under the Law. A monopoly agreement is defined as any agreement, decision or concerted behavior that eliminates or restricts competition.⁴ The AML groups monopoly agreements into two broad categories: (1) those between/among competing businesses (“horizontal monopoly agreements”), and (2) those between/among businesses and their trading parties (“vertical monopoly agreements”).

Horizontal monopoly agreements: Under the AML, business competitors are prohibited from entering any of the following six types of horizontal monopoly agreements: those that (1) fix or change product prices, (2) limit product output or sales volume, (3) divide among the parties the sales market or the raw-material supply market, (4) restrain purchase of new technology or equipment, or restrain development of new technology or products, (5) coordinate boycott behavior, or (6) are otherwise determined to be monopolistic in nature by the Agency.⁵

Vertical monopoly agreements: Article 14 of the AML prohibits vertical monopoly agreements between/among business operators (e.g., an OEM) and their trading parties (e.g., a retailer) in the following categories: those (1) fixing product resale price, (2) setting the minimum resale price, or (3) which are otherwise determined as monopolistic by the Agency. Although not explicitly stated, the AML does not prohibit business operators from implementing pricing caps upon their downstream trading parties.

Exemption: Despite the foregoing, the AML provides some carve-outs for certain agreements that would otherwise qualify as horizontal or vertical monopoly agreements. Provided that a business operator can prove that an agreement at issue (1) does not substantially restrict competition in the “relevant market” (a product’s market scope or a business operators’ competitive territory),⁶ and (2) can enable consumers of its products to share the benefit from the agreement ((1) and (2) collectively, the “Conditions”), agreements regarding certain activities will be exempted from monopoly agreement status. Exempt activities are (1) the development or improvement of new technology or products, (2) the improvement of product quality, reduction of product cost, enhancement of efficiency or labor division, or unification of product specifications/standards, (3) the enhancement of the operational efficiency and competitiveness of small and medium-sized business entities, (4) the creation of social benefits such as energy conservation, disaster relief and environmental protection, and (5) the alleviation of a potential decline in sales volume or excessive production during periods of economic recession or depression.

Without meeting the above Conditions, an agreement that otherwise qualifies as a monopoly agreement can also be exempted from monopoly agreement status if the business entity under evaluation can prove that the agreement was entered to protect the entity’s legitimate interests in foreign trade (i.e. trade with businesses outside of China) or in foreign economic cooperation.⁷ In addition, some other exempt activities can be later prescribed by law or the State Council.

Restriction on business associations’ monopoly behavior: The AML also forbids a business association from organizing its business members to participate in activities prohibited under Chapter II of the AML, which lays out the monopoly agreement definitions, exemptions, restrictions and liabilities discussed in this Preview.⁸

Legal liability in the absence of exemption: If a business operator has engaged in a monopoly agreement without exemption, the Agency must order the business operator to stop the violation, confiscate its illegal gains, and impose a fine or penalty within the range of one to 10 percent of the business operator’s sales revenue in the immediate preceding year.⁹ If the monopoly agreement has not yet been performed, a fine of less than RMB 500,000 Yuan (equivalent to about USD $67,000) can be imposed.¹⁰ In situations where a trade or business association organizes its members to reach any monopoly agreement, the Agency may impose a fine of less than RMB 500,000 Yuan on the association; or for serious violations, the business association’s registration may be deregistered or terminated.¹¹

In comparison with the draft version of the AML submitted to the Standing Committee of the National People’s Congress for the first time in 2006, the final version of the AML applies less restrictive rules to monopoly agreements. The final version adopts the “rule of reason” instead of a “per se rule” to the two types of monopoly agreements. Therefore, only those monopoly agreements that “eliminate or restrict competition” are prohibited.

Abusive market dominance

While a business operator with a market dominant position is not per se illegal under the AML, any conduct by an operator that abuses such position is prohibited by the Law. A business operator will be subject to the restrictions of Chapter III of the AML only if it has achieved “dominant market status,” as described below.

Presumption of dominant market status: Mainly to enhance administrative efficiency, business operators meeting certain criteria will be presumed to possess dominant market status, even if no agreement exists or if there is no coordination of conduct. Article 19 of the AML provides that a business operator is deemed to have, unless proven otherwise, dominant market status if such operator: (1) possesses one-half or more of total market share in the “relevant market,”(see “Dominant market status factors,” below, for definition) (2) together with another business operator, controls two-thirds or more of total market share in the relevant market, or (3) together with two other business operators, accounts for three-fourths or more of total market share in the relevant market.¹² However, if any business operator under analysis possesses a market share of less than one-tenth of the relevant market, that operator will not be considered as having dominant market status.¹³

A business operator presumed to have a dominant market status will not be determined to have such status “provided that there is opposite evidence.”¹⁴ Thus, any business operator that is initially presumed to possess dominant market status can disapprove the presumption by showing that it in fact does not have the suggested dominance in the relevant market.

Dominant market status factors: Under the AML, a business operator will be treated as possessing dominant market status if such operator can: (1) control the price or supply quantity of commodities, (2) impose trading conditions in the relevant market, or (3) block or affect the entry of other business operators into the relevant market.¹⁵ For the purposes of the AML, a relevant market is the product’s market scope or the territorial area within which the business operators compete against each other during a certain period regarding the specific product or service.¹⁶ The AML provides six factors to consider in determining whether a business operator has reached dominant market status: (1) the operator’s market share and the competitive situation in the relevant market, (2) the operator’s ability to control the sales market or the procurement market of raw materials, (3) the operator’s financial strength and technical capabilities, (4) reliance on the business operator by other business operators in the transaction, (5) the barrier of entry for other business operators to enter the relevant market, and (6) other factors to be determined by the Agency and relating to the market dominance position of the business operator.¹⁷ Although none of the above factors is decisive, market share often is the starting point for the dominant market status analysis.

Abusive dominance activities: Once a business operator is determined to possess dominant market status, it will be illegal for the operator (the “dominant operator”) to engage in any of the following types of activities: (1) selling products at unfairly excessive prices or buying products at unfairly low prices, (2) without justifiable explanation, selling products at below-cost price, (3) without justifiable explanation, refusing to trade with other parties, (4) without justifiable explanation, entering exclusive dealing arrangements with business parties (“trading parties”) to exclude the trading parties from dealing with third parties or to force the trading parties to deal exclusively with certain third parties specified by the dominant operator, (5) without justifiable explanation, bundling or tying-in different products for sale as one unit or otherwise imposing unreasonable business or trade conditions, (6) without justifiable explanation, discriminating among trading parties using price differentiation or by imposing differentiated conditions to such trading parties, or (7) other conduct deemed as abusive dominance activity by the Agency.¹⁸

Legal liability: Upon any abuse of dominant market status, the Agency can (1) order the abusive business operators to stop such violation(s), (2) confiscate any illegal gains, and (3) impose a fine in the range of one to 10 percent of the total sales volume of the relevant operator in the immediate preceding year.¹⁹

Concentration activities

Currently, according to the Provision on the Merger and Acquisition of Domestic Enterprises by Foreign Investors, foreign investors engaged in M&A transactions are required to file anti-monopoly notifications with the Ministry of Commerce of the People’s Republic of China (MOFCOM), and also with the State Administration for Industry and Commerce (SAIC) in certain circumstances. Upon the AML’s implementation, parties engaged in a concentration activity, including M&A, are required to file notification with the Agency at the same time if certain thresholds are met.

Chapter IV of the AML deals with “concentration activities” and requires such activities to be reported (“reporting requirements”) to the Agency prior to their execution if the activities will result in a high concentration of business power exceeding the “reporting threshold.” “Concentration activities,” under the AML, means (1) a business merger, (2) an acquisition of control over other business operators via asset or equity purchase, or (3) situations where a business operator acquires control or decisive influence over other business operators by contract or any other means.²⁰ While the AML did not set forth the reporting threshold in the Law itself, it provides that the threshold will be prescribed from time-to-time by the State Council.²¹

Activities exempted from reporting requirements: Under the AML, two types of concentration activities are exempted from the reporting requirements. Where several business operators are involved in a concentration activity, none of the operators needs to report the activity if (1) any one of the business operators involved in the activity holds 50 percent or more of the voting shares or assets of every other business operator in the activity, or (2) a business operator not involved in the concentration activity holds 50 percent or more of the voting shares or assets of every other business operator involved in the activity.²²

Reporting procedures: If the concentration activities at issue are not exempted from the reporting requirements, the relevant business operators shall submit to the Agency a set of documents (“reporting documents”) to fulfill the reporting or application requirements. The reporting documents must include, among other things, explanations of the effects of the concentration activities on the relevant market’s competition status and any agreements entered in relation to the concentration activities.²³

In general, within 30 days after the submission of the application, the Agency is required to conclude its examination (the “preliminary examination”) and notify the reporting business operators in writing of its decision as to whether the examination needs extension (the “preliminary decision”).²⁴ In situations where the Agency decides to make further examination, it shall notify the corresponding business operators of its decision in writing. Such extended examination shall be completed within 90 days after the issuance of the preliminary decision. In situations where the application is denied, the Agency shall provide the reasons behind such denial.²⁵ In some special situations, e.g., when the circumstances relevant to the reporting documents change significantly after the submission, the Agency may extend the period for further examination, but in no circumstances shall such extension be for a period of longer than 60 days.²⁶

If the Agency fails to make a decision within the time limits stated above, the business operators are entitled to move forward and implement the concentration activities.²⁷

Determining the extent of concentration: If the Agency determines that a concentration activity will, or may, restrict market competition, it shall make its decision to prohibit the concentration activity at issue.²⁸ In making this decision, the Agency must consider the following factors: (1) the participating business operators’ market share in the relevant market and their control over the market, (2) the market concentration level in the relevant market, (3) the impact of business concentration or concentration of business operators on the relevant market’s barriers to entry and to technology development, (4) the impact of the business concentration or concentration of business operators on consumers and on other relevant business operators, (5) the impact of business concentration or concentration of business operators on national economic development, and (6) other factors that may affect market competition as the Agency may determine.²⁹ Since most of the above factors are relatively loosely defined, they leave uncertainty, which the Agency will hopefully lessen by the issuance of implementation regulations.

Cost-benefit defense: In the event the Agency believes, after considering the aforesaid factors, that the concentration activity will restrict market competition and, therefore, intends to stop the activity, the Agency is still entitled to make a decision not to prohibit the concentration at issue if the involved business operator is able to prove to the Agency that (1) the benefits to competition that the activity will bring obviously exceed the adverse impacts, or (2) the activity favors or is in harmony with public interests.³⁰ After the analysis, the Agency may (1) approve the concentration activity, (2) make the approval contingent upon certain conditions to reduce the activity’s potential adverse impact on competition, or (3) prohibit the activity altogether.³¹ If it decides to either prohibit the activity or to condition its approval, the Agency must publicize its decision in a timely manner.³² If foreign investors are involved via acquisition of domestic enterprises or engaging in concentration activities by any other means, which have a concern with national security, an examination on national security shall also be conducted according to relevant laws in addition to the anti-monopoly examination prescribed herein.³³

Legal liability: For any concentration activity that violates the Law, the Agency shall (A) order the involved business operators to: (1) stop the concentration activity, (2) dispose of the corresponding shares or assets in a designated period, (3) transfer the business in a designated period and adopt any other necessary measures to restore to the state prior to the activity; and may (B) impose a fine of less than 500,000 Yuan.³⁴

Abusive governmental or administrative conduct

The AML has established quite comprehensive guidelines to proscribe abusive governmental conduct in the anti-monopoly context. It coordinates and includes all the terms restricting administrative monopolies in current laws.

Under the AML, governmental agencies and institutions empowered by laws and regulations to manage public affairs must not abuse their administrative power by, among other things, (1) forcing, by whatsoever means, any individuals or entities to distribute, purchase or use products from particular supplier(s) designated by such agencies,³⁵ (2) interfering with the free flow of products among different regions,³⁶ (3) interfering or preventing any non-local business operators from participating in local tendering or bidding activities,³⁷ (4) rejecting or restricting non-local business operators from investing in local businesses or establishing local branches or subsidiaries,³⁸ or (5) forcing business operators to conduct monopolistic activities proscribed by the AML.³⁹ In addition, Article 37 of the AML prohibits governmental agencies from promulgating any rules containing contents that eliminate or restrict competition.

Legal Liabilities: To the extent that the AML is violated by any governmental agencies or institutions empowered by laws and regulations to manage public affairs (collectively, the “institution”), the higher authorities in charge of such institution shall be responsible for stopping such violation and holding the responsible person(s) legally liable. The Agency may also directly make suggestions to the higher authorities to stop such violations and ask for treatment.⁴⁰

The enforcement authority of the AML

At present there is no unified enforcement agency responsible for anti-monopoly investigation. Cartel pricing is subject to the regulation of the National Development and Reform Commission (NDRC); monopolistic behavior of public utilities is subject to the regulation of SAIC; and mergers and acquisitions are subject to the regulation of MOFCOM and SAIC.

According to the AML, the State Council shall establish a new committee (the “Anti-Monopoly Committee”) to, among other functions, draft relevant anti-monopoly policies and guidelines and coordinate any anti-monopoly administrative law enforcement.⁴¹ One observation is that the Anti-Monopoly Committee will not be the enforcement agency of the AML. Based on the AML, the State Council is yet to designate an anti-monopoly law enforcement agency to enforce the AML.⁴² The Agency will have full authority to make investigations of any suspicious monopolistic activities pursuant to the Law.⁴³ Since the agency has not yet been designated by the State Council, it is too early to tell whether the enforcement authority will be bestowed to NDRC, SAIC, MOFCOM or a brand new governmental agency or unit.

Procedures for investigation of monopolistic conduct

The AML specifically states that certain investigation procedures (e.g., entering business enterprises, questioning business operators or its agents, copying business documents, seizing relevant evidence and investigating business operators’ bank accounts) can be taken by the Agency only with prior approval from the Agency’s principal officer(s).⁴⁴ Furthermore, at least two law enforcers must be simultaneously present and present their certificates when investigating any suspicious monopolistic conduct. The enforcers are required to take written notes to record any investigation, and to let inquirees or investigatees sign on the same.⁴⁵ The law enforcers and the Agency must not reveal to third parties any trade secret or confidential information accessed during the investigation.⁴⁶

Foreseeable impact: Anti-monopoly issues in distribution arrangements

Compared to other commercial activities, a distribution arrangement between a producer and a distributor may raise the most concern for business operators under the AML, since exclusive distribution and price maintenance are common practice in commercial distribution.

The existing Chinese legal system has several laws and regulations concerning unfair competition by price control and price manipulation, the most significant pieces of which are PRC Anti-Unfair Competition Law, Pricing Law, and Provisional Regulation on Prohibiting Acts of Price Monopoly. Although none of these laws and regulations have used terms such as “monopoly agreement” or “abuse of market dominance,” most of the anti-monopoly conduct prohibited in the form of monopoly agreement or abuse of market dominance under the AML—such as price fixing or restricting the minimum resale price of products under the monopoly agreement, taking advantage of market dominance to sell products at prices below cost, or applying discriminatory treatments on trading prices—have already been proscribed under existing laws and regulations. Therefore, under current laws, distribution agreements cannot include trading terms with the effect of controlling or manipulating prices in the commodities market.

In contrast with existing laws and regulations, which focus on the prohibition of price manipulation, the AML uses legal terms such as “monopoly agreement” and “abuse of market dominance” to expand the regulatory scope to prohibit a wider range of inappropriate commercial conduct. Therefore, while the existing laws focus on the conduct of price manipulation or price control, the AML pays more attention to prohibiting the restriction or elimination of business competition. Therefore, under the AML, trading arrangements such as exclusive distribution arrangements may violate the Law even if such arrangements are not made with the intent to control prices.

Second, the AML provides safe harbors, or exemptions, for certain types of otherwise monopolistic agreements which are not available under the existing laws. Therefore, the Law allows enterprises to argue for their reasonable rights under some agreements having the effect of price manipulation or competition restriction. For example, the producer can argue the importance of standardized product quality as a justifiable reason for exclusive distribution. However, it is still subject to the discretion of the enforcement authority to agree or disagree.

Third, the AML establishes the assumption of market dominance for certain mega-market operators; this is the first time that the Chinese legal system has been used in market dominance assumption in support of anti-monopoly enforcement. This provision directly aims at those giant enterprises with significant influence in the market. Although the Law allows a business entity to defend against the assumption, it will likely be very difficult to rebut the presumption in practice. The established mechanisms in the AML can be a warning to both producers and distributors with a high concentration of market share, when they set up trading terms to control pricing or block other participants from coming to market.

Foreseeable impact: Intellectual property licensing

Compared to other commercial activities, the licensing of intellectual property is most closely intertwined with anti-monopoly law, since there is no clear boundary between intellectual property protection and competition restriction. Article 55 of the AML applies the Law to the conduct of companies in eliminating or restricting market competition by abusing their intellectual property rights. However, without a clear definition of “abusing their intellectual property rights,” the AML only offers general prohibitions under its sections on monopoly agreement and abuse of market dominance that may be applied in the area of intellectual property—e.g., prohibitions against taking advantage of market dominant position to implement tie-in sales, imposing unreasonable trading conditions, refusing trade without justifiable reasons, fixing prices with the trading party, or other unjustifiable differential treatments.

Before the launch of the Anti-Monopoly Law, Article 329 of the Contract Law, Article 10 of the Interpretation of the Supreme People’s Court concerning Some Issues on Application of Law for the Trial of Cases on Disputes over Technology Contract (the “Interpretation”), and Article 29 of the Regulations on Administration of Technology Import and Export of PRC (the “Regulations”) constituted the legal basis to regulate apparently monopolistic activities occurring in the form of technology transfer contracts. The relevant provisions focus on patent licensing. For example, Article 329 of the Contract Law establishes a general principle of invalidating any technology contract that illegally monopolizes the technology. Article 10 of the Interpretation identifies six licensing conditions that may monopolize technology and cause invalidation of technology contracts. Furthermore, Article 29 of the Regulations prevents technology import contracts from including several restrictive terms, which are unfair trading conditions with the effect of restricting competition.

Compared with the detailed instructions of the current laws and regulations, without follow-up detailed regulations, it will be almost impossible for the AML to substitute for current laws and regulations. When reviewing the monopoly issues in the licensing of patents in the form of technology transfer, we must still rely on the Interpretation and the Regulations for practical guidance.

As for the other fields of intellectual property, such as trademark and copyright, the current legal system has no detailed provisions on the prohibition of monopolistic conduct occurring in those areas. Therefore, some trading terms that may restrict competition when licensing a trademark or copyright (which used to be legally enforceable under the current Copyright Law or Trademark Law) may be considered as abusive of intellectual property under the AML.

Foreseeable impact: Anti-monopoly investigation in M&A transactions

Compared to the anti-monopoly investigation requirements provided by the existing Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (PMADEFI), the AML has made the following changes:

First, contrary to the PMADEFI, the AML requires not only the foreign investors to file an anti-monopoly notification (to MOFCOM and SAIC), but also requires domestic companies to file such notification (to the Agency) if certain thresholds are met. However, the PMADEFI has established specific thresholds of notification such as the previous year’s turnover and market share. The AML has no such detailed standard, an omission that may be filled by executive regulations to be established later.

Second, the PMADEFI limited anti-monopoly investigation to acquisition transactions such as asset purchases and equity purchases. In contrast, the AML has expanded the terms of operators’ concentration from M&A to circumstances in which a business operator obtains control of another by means of contract. Thus, some company restructures, even without asset purchase or equity transfer, still may be regarded as a concentration of business operators, and subject to anti-monopoly investigation under the AML.

Third, the PMADEFI and the AML have different investigation exemptions. In PMADEFI, any party engaged in the M&A transaction can apply for an investigation exemption under any of the following occasions: (1) improving fair competition in the market, (2) restructuring an enterprise suffering loss of capital and maintaining employment, (3) introducing advanced technology and talents to enhance the global competitiveness of the enterprise, or (4) improving the environment. The AML focuses on the relationship between the parties involved in the concentration. For instance, the AML provides that under the following occasions, the operator does not need to report to the Agency: (1) one of the operators participating in the concentration owns more than 50 percent of the voting rights of the other operator, and (2) an operator not participating in the concentration owns more than 50 percent of the voting rights of each operator participating in the concentration. Also, the AML states that if the business operator can demonstrate that its concentration has more positive effect than negative effect or enhances the public benefit, the Agency can approve the concentration even if it does have the effect of restricting or eliminating competition.

Fourth, the AML requires a national security investigation of the transaction under some circumstances. The PMADEFI does not specify such investigation, but requires a report from the corresponding foreign investor if the acquisition target company is involved in some crucial industry or its acquisition would have some impact on the economic security of the country. It is impossible to compare the standard of the national security investigation under the AML with the economic security investigation under the PMADEFI, because the AML does not set forth any details to clarify the conditions necessary to trigger a national security investigation.

Last, but not least, compared to PMADEFI, the AML has more detailed procedural processes with which to improve both the timeline and transparency of the investigation.

Conclusion

Questions remain as to whether the AML will be equally implemented and enforced against both foreign and domestic companies. Furthermore, while many people would like to see monopolistic activities based on government or semi-government power be constrained through the implementation of the AML, it is unclear how much impact the Law will have in that respect. Despite the fact that it is probably too early to predict how the AML will be implemented and enforced, it is still critical for those foreign companies doing business in China to review their business activities in preparation for the AML’s implementation.

Footnotes

1 See Article 50 of the AML.
2 See Article 12 of the AML.
3 See Article 56 of the AML.
4 See Article 13 of the AML.
5 See Article 13 of the AML.
6 See Article 12 of the AML.
7 See Article 15(6) of the AML.
8 See Article 16 of the AML.
9 See Article 46 of the AML.
10 See Article 46 of the AML.
11 See Article 46 of the AML.
12 See Article 19 of the AML.
13 See Article 19 of the AML.
14 See Article 19 of the AML.
15 See Article 17 of the AML.
16 See Article 12 of the AML.
17 See Article 18 of the AML.
18 See Article 17 of the AML.
19 See Article 47 of the AML.
20 See Article 20 of the AML.
21 See Article 21 of the AML.
22 See Article 22 of the AML.
23 See Article 23 of the AML.
24 See Article 25 of the AML.
25 See Article 26 of the AML.
26 See Article 26 of the AML.
27 See Article 25-26 of the AML.
28 See Article 28 of the AML.
29 See Article 27 of the AML.
30 See Article 28 of the AML.
31 See Article 29 of the AML.
32 See Article 30 of the AML.
33 See Article 31 of the AML.
34 See Article 48 of the AML.
35 See Article 32 of the AML.
36 See Article 33 of the AML.
37 See Article 34 of the AML.
38 See Article 35 of the AML.
39 See Article 36 of the AML.
40 See Article 51 of the AML.
41 See Article 9 of the AML.
42 See Article 10 of the AML.
43 See Article 38 of the AML.
44 See Article 39 of the AML.
45 See Article 40 of the AML.
46 See Article 41 of the AML.

For more information, please contact:

Ron Cai Shanghai, China (011) 86-21-6279-8560 roncai@dwt.com

Jim H. Young Seattle, Washington (206) 622-3150 jimyoung@dwt.com

This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments in China. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations. Attorney Advertising. Prior results do not guarantee a similar outcome. Thank you.

Copyright © 2007, Davis Wright Tremaine LLP.

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