| 
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:
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.
Copyright © 2007, Davis Wright
Tremaine LLP.
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