JC Master Legal News Issue 1125

Key Takeaways for This Issue

The National Administration of Financial Regulation has issued a document to standardize compliance management at financial institutions.
The National Administration of Financial Regulation has launched a public consultation on the “Administrative Measures for Compliance Management of Financial Institutions (Draft for Comments),” with the deadline for submitting feedback set for September 17, 2024.
The Supreme People’s Court and the Supreme People’s Procuratorate have jointly issued a criminal judicial interpretation on money laundering, designating transactions involving “virtual assets” as one of the methods of money laundering.
On August 19, the Supreme People’s Court and the Supreme People’s Procuratorate jointly held a press conference to release the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering.”
The Political Bureau of the CPC Central Committee reviewed the “Several Policy Measures for Further Promoting the New Pattern of the Great Western Development.”
On August 23, the Political Bureau of the CPC Central Committee convened a meeting to deliberate on “Several Policy Measures for Further Advancing the Great Western Development and Shaping a New Pattern.”
Three ministries: Implement stringent regulation over intermediary agencies providing IPO services; explicitly ban “listing incentive fees.”
The Ministry of Justice, in collaboration with the Ministry of Finance and the China Securities Regulatory Commission, has drafted the “Regulations of the State Council on Regulating Intermediary Institutions Providing Services for Companies’ Public Offerings of Shares (Draft for Public Comment),” with a public comment period from August 16, 2024, to September 15, 2024.
Finance & Capital Markets
The China Securities Regulatory Commission has released the Accounting Supervision Report on Listed Companies’ 2023 Annual Financial Reports.
As of April 30, 2024, a total of 5,354 listed companies in the A-share market had disclosed their 2023 annual financial reports, including 3,195 on the Main Board, 1,340 on the ChiNext Board, 571 on the STAR Market, and 248 on the Beijing Stock Exchange. Among them, 4,228 reported profits, while 1,126 recorded losses. Of the listed companies that filed their annual financial reports on time, 209 received audit reports with non-standard opinions: 29 with an inability to express an opinion, 85 with a qualified opinion, and 95 with an unqualified opinion accompanied by an explanatory paragraph.

The China Securities Regulatory Commission (CSRC) has assembled a dedicated team to conduct sample reviews of listed companies’ 2023 annual financial reports, and on this basis has prepared the “Accounting Supervision Report on Listed Companies’ 2023 Annual Financial Reports.” Overall, listed companies have generally complied with enterprise accounting standards and financial information disclosure requirements; however, some companies still exhibit errors in accounting treatment or financial reporting in areas such as revenue recognition, long-term equity investments and business combinations, financial instruments, asset impairment, income taxes, and non-recurring gains and losses. In response to these issues, the CSRC will, in the next phase, undertake the following measures: first, systematically sort through and follow up on leads identified during the review process, ensuring timely regulatory oversight and appropriate follow-up actions in accordance with applicable rules; second, convene an annual accounting supervision coordination meeting to address typical issues uncovered in the course of regulatory work, thereby standardizing supervisory approaches; and third, closely monitor emerging market‑wide challenges and contentious accounting matters, continuing to provide practical guidance through case analyses and other formats to enhance the consistency and effectiveness of the capital market’s implementation of enterprise accounting standards and financial information disclosure requirements.

Listed companies and intermediary institutions, including accounting offices, should attach great importance to the issues raised in accounting regulatory reports, promptly rectify any errors in their financial reporting, continuously strengthen their ability to understand and apply corporate accounting standards and financial information disclosure rules, prudently carry out all tasks related to the financial information disclosure of listed companies, consistently enhance the quality of accounting disclosures, and thereby promote the high-quality development of the capital market.

The seminar received a positive response, earning full recognition and strong support from relevant authorities on both sides. Participants from various sectors noted that the event vividly showcased China’s economic dynamism and the diverse opportunities for investment and industrial cooperation, while afofficeing that the alignment of Chinese and Arab capital serves the mutual interests of both parties and helps foster win-win development in the real economy.

Going forward, the Shenzhen Stock Exchange will continue to implement the requirements set forth by the China Securities Regulatory Commission, further leverage its role as a capital market hub and platform, deepen connectivity with overseas capital markets, proactively expand the depth and breadth of services for international investors, and steadily advance institutional opening-up of the capital market, thereby better supporting the establishment of a new development paradigm and contributing to high-quality development.

The China Securities Regulatory Commission has approved the registration of options on lead, nickel, tin, and alumina.
Recently, the China Securities Regulatory Commission has approved the registration of lead, nickel, tin, and alumina options on the Shanghai Futures Exchange. The CSRC will urge the Shanghai Futures Exchange to make all necessary preparations to ensure the smooth launch and stable operation of these options contracts.

The National Administration of Financial Regulation has issued a document to standardize compliance management at financial institutions.
The National Administration of Financial Regulation has launched a public consultation on the “Administrative Measures for Compliance Management of Financial Institutions (Draft for Comments),” with the deadline for submitting feedback set for September 17, 2024.

The Measures comprise five chapters and sixty-five articles, covering key provisions such as general principles, compliance management responsibilities, compliance management safeguards, and supervisory oversight and legal liabilities. The Measures require financial institutions to appoint a Chief Compliance Officer at their headquarters and to designate compliance officers at provincial‑level branches (including separately listed cities) or at first‑tier branches. They also establish robust measures to ensure the effective performance of duties by the Chief Compliance Officer, compliance officers, and compliance management departments and personnel. Furthermore, the Measures clearly set out relevant administrative penalties and other regulatory measures, imposing strict accountability for violations committed by financial institutions and their staff—particularly directors, senior management, the Chief Compliance Officer, and compliance officers—who fail to implement compliance management effectively, thereby strengthening disciplinary enforcement.

The Supreme People’s Court and the Supreme People’s Procuratorate have jointly issued a criminal judicial interpretation on money laundering, designating transactions involving “virtual assets” as one of the methods of money laundering.
On August 19, the Supreme People’s Court and the Supreme People’s Procuratorate jointly held a press conference to release the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering.”
The Interpretation comprises 13 articles, with the main provisions as follows: First, it clarifies the criteria for determining the offenses of “self‑laundering” and “other‑person laundering,” as well as the standards for examining and ascertaining the subjective knowledge required for the offense of “other‑person laundering.” Second, it specifies the criteria for identifying “serious circumstances” in the crime of money laundering. Third, it delineates seven specific scenarios falling under the category of “concealing or disguising the source and nature of proceeds of crime and their gains by other means.” Fourth, it sets forth the principle governing concurrent punishment when the crime of money laundering overlaps with the crimes of concealing or disguising proceeds of crime and their gains. Fifth, it establishes the standards for determining the amount of fines, specifying minimum fine amounts applicable to different statutory sentencing ranges. Sixth, it defines the criteria for granting lenient punishment.

The Interpretation classifies transactions involving “virtual assets” as one of the methods of money laundering. It clarifies that transferring or converting criminal proceeds and their gains through transactions in “virtual assets” or through the exchange of financial assets may be deemed to constitute “concealing or disguising the source and nature of criminal proceeds and their gains by other means,” as stipulated in Article 191, Paragraph 1, Item 5 of the Criminal Law.
Three ministries: Implement stringent regulation over intermediary agencies providing IPO services; explicitly ban “listing incentive fees.”
The Ministry of Justice, in collaboration with the Ministry of Finance and the China Securities Regulatory Commission, has drafted the “Regulations of the State Council on Regulating Intermediary Institutions Providing Services for Companies’ Public Offerings of Shares (Draft for Public Comment),” with a public comment period from August 16, 2024, to September 15, 2024.
The draft consists of nineteen articles and primarily sets forth the following provisions: First, it clarifies the legislative objectives and scope of application. Second, it establishes the basic principles governing the practice and fee‑setting of intermediary institutions. Third, it lays down specific requirements for the professional conduct and fee‑collection practices of relevant entities, stipulating that accounting offices may not make the outcome of a public offering and listing of shares a condition for charging fees, and that law offices may not violate the regulations on attorney‑service fees issued by judicial administration authorities and other competent departments; furthermore, people’s governments at all local levels may not grant rewards to issuers or intermediary institutions contingent upon the outcome of a public offering and listing of shares. Any rewards granted in violation of these provisions shall be recovered. Fourth, it provides for supervisory measures and legal liabilities.

Commercial & Corporate
The Political Bureau of the CPC Central Committee reviewed the “Several Policy Measures for Further Promoting the New Pattern of the Great Western Development.”
On August 23, the Political Bureau of the CPC Central Committee convened a meeting to deliberate on “Several Policy Measures for Further Advancing the Great Western Development and Shaping a New Pattern.”
The meeting emphasized the need to comprehensively deepen reform, further liberate and develop social productive forces, and invigorate and strengthen societal vitality, thus forging a path of Chinese modernization that is well-suited to the region’s realities. It called for leveraging functional positioning and industrial foundations to bolster and expand distinctive, competitive industries, with a strong focus on enhancing scientific and technological innovation capabilities and driving the transformation and upgrading of traditional sectors. The meeting also stressed the importance of upholding high‑level environmental protection, advancing the development of a beautiful western region, coordinating integrated conservation and systematic governance of mountains, rivers, forests, farmland, lakes, grasslands, and deserts, intensifying efforts to prevent and control environmental pollution, and promoting green, low‑carbon development. Furthermore, it underscored the need to continuously strengthen endogenous drivers of development and elevate the level of an open economy. Finally, it highlighted the imperative of reinforcing security capacities in key areas, ensuring robust energy and resource supplies, and advancing the construction of clean‑energy hubs, among other measures.

Two departments have issued the “Basic Rules for Medium- and Long-Term Electricity Trading—Special Chapter on Green Electricity Trading.”
On August 23, the website of the National Development and Reform Commission published the “Notice on Issuing the ‘Basic Rules for Medium- and Long-Term Electricity Trading—Special Chapter on Green Electricity Trading.’”
The two departments have called for accelerating the establishment of a market system and long-term mechanisms that promote the production and consumption of green energy, integrating green power trading into medium- and long-term electricity markets to meet the demand of electricity users for purchasing green power. They have also required grid operators to faithfully fulfill their responsibilities for metering electricity volumes and settling related fees, thereby ensuring the proper execution of green power trading contracts. Furthermore, they have specified that electricity trading institutions should continuously refine and enhance all aspects of their preparatory work—ranging from organizing green power transactions and managing trade settlements to improving information disclosure and platform development—and conduct comprehensive aggregation and analysis of green power trading and green electricity consumption data, so as to provide convenient services for power generators, electricity users, and retail suppliers.

The Ministry of Industry and Information Technology has deployed the 2024 work on the recognition and registration of technology contracts.
On August 23, the website of the Ministry of Industry and Information Technology published the “Notice on Doing a Good Job in the Registration and Certification of Technology Contracts for 2024.”
The Notice clarifies that provincial-level competent authorities shall guide and supervise registration agencies within their jurisdictions to refine their work procedures, job responsibilities, risk‑control mechanisms, and other relevant systems, thereby further strengthening the registration and review process. They are also required to enhance training for personnel involved in technology contract registration to improve their competence and professional standards; implement categorized registration based on the type of technology contract; verify and conoffice the transaction amounts; and refuse registration for contracts that fail to meet the prescribed requirements, ensuring that registration is conducted in a standardized and effective manner. Furthermore, provincial-level authorities shall organize random inspections of a specified proportion of technology contracts, with particular emphasis on high‑value contracts—typically those exceeding RMB 5 million. Registration agencies found through such inspections to be operating in a disorderly manner, engaging in non‑compliant registrations, or submitting inaccurate statistical data shall have their registration activities suspended and be ordered to make rectifications within a set timeframe; if, after rectification, the same issues persist, their registration agency status shall be revoked.

The Ministry of Commerce is launching the development of Commercial Technology Application Innovation Centers.
On August 22, the Ministry of Commerce website published the “Notice on Launching the Construction of Centers for Innovation in the Application of Commercial Technologies.”
The Notice outlines three key development tasks: (1) Promote the application of new technologies. Advance the deep integration of cutting-edge, leading-edge technologies such as artificial intelligence into the commercial sector, facilitate the dissemination of new technologies and the transformation and upgrading of traditional industries, and foster the growth of emerging industries. Develop technical standards in priority commercial sectors that significantly enhance industrial competitiveness, and accelerate the translation of scientific and technological innovations into standardized practices. (2) Facilitate the commercialization of scientific and technological achievements. (3) Aggregate resources for commercial technology innovation.

The National Intellectual Property Administration has issued guidelines on the restoration of priority rights and the system for adding or amending priority claims.
Recently, the website of the National Intellectual Property Administration published the “Guidelines on the Restoration of Priority Rights and the Addition or Correction of Priority Claims.”
The amended Implementing Rules of the Patent Law have introduced new provisions for the restoration of priority rights and for the addition or correction of priority claims. These new mechanisms provide applicants with additional effective remedies regarding priority‑period deadlines and procedural requirements, while aligning with the relevant rules governing international applications under the Patent Cooperation Treaty. The Guidelines primarily elaborate on the institutional background, applicable conditions, processing procedures, and typical cases related to the restoration of priority rights and the addition or correction of priority claims, thereby helping innovation entities accurately understand and appropriately apply these two sets of provisions.

The State Administration for Market Regulation is hosting the 2024 China Fair Competition Policy Promotion Week.
On August 22, the website of the State Administration for Market Regulation published the “Notice on Launching the 2024 China Fair Competition Policy Publicity Week.”
The Notice specifies that relevant authorities will host the 2024 China Fair Competition Policy Promotion Week from September 9 to 13, under the theme “A Unified National Market, Fair Competition for the Future.” The event will intensify public awareness and dissemination of laws, regulations, and policies, including the Regulations on Fair Competition Review. Special emphasis will be placed on promoting the newly issued 2024 documents: the State Council’s Provisions on Standards for Filing Concentrations of Undertakings, the Anti-Monopoly Guidelines for Industry Associations, the Anti-Monopoly Compliance Guidelines for Undertakings, and the Provisional Regulations on Online Unfair Competition. These measures aim to help all types of market entities accurately interpret legal requirements, strengthen their awareness of fair‑competition compliance, enhance compliance‑building efforts, and foster a corporate culture characterized by integrity, lawfulness, and fair competition.

Beijing has issued the Compliance Guidelines for Residential Elevator Operators.
On August 20, the Beijing Municipal Administration for Market Regulation published the “Notice on Issuing the Compliance Guidelines for Residential Elevator Operators.”
The Notice clarifies that market supervision authorities in each district shall strengthen oversight of elevator safety, focusing on elevator‑using entities such as property service companies. They are to conduct public awareness campaigns and provide professional training to help residential elevator operators clearly understand compliance requirements, adopt a compliance‑oriented mindset, and enhance their compliance awareness, thereby ensuring that elevator management is carried out in accordance with the law. Meanwhile, housing and urban–rural development departments in each district are to actively coordinate with their respective market supervision authorities, supervising property service companies to strictly fulfill their responsibilities for residential elevator safety management in line with the provisions of this Compliance Guideline, and to ensure that elevator maintenance and upkeep are performed effectively, thus guaranteeing the safe operation of elevators.

Jiangsu Announces Unemployment Insurance Policy for Stabilizing Employment and Returning Funds
On August 23, the Jiangsu Provincial Department of Human Resources and Social Security published the “Notice on Effectively Carrying Out the 2024 Unemployment Insurance Stabilization and Retention Refund Program.”
The Notice clarifies that the unemployment insurance policy for stabilizing employment aims to help enterprises maintain job positions and promote steady economic development. In general, enterprises must have paid unemployment insurance contributions in full for at least 12 consecutive months and have no outstanding arrears to qualify for the refund. Small, medium, and micro enterprises, as well as individual business households, are eligible for a refund equal to 60% of their actual unemployment insurance contributions from the previous year, while large enterprises and other entities receive a refund of 30%. The refunded funds may be used for employee living allowances, payment of social insurance premiums, and other purposes. In addition, labor dispatch agencies are also entitled to the unemployment insurance stabilization refund, provided they meet specific eligibility criteria.

The CPC Central Committee and the State Council have jointly issued a document: Improving the market access system and implementing “easy entry, strict regulation.”
On August 21, the Chinese government website published the “Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Improving the Market Access System,” which sets forth ten key areas.
The Opinions call for refining the negative-list management model for market access. All market‑access measures, including both permanent and temporary ones, are to be incorporated into a nationally unified negative list. It is strictly prohibited to establish unauthorized access permits, impose additional, unwarranted entry requirements, or independently formulate negative lists that effectively function as market‑access restrictions outside the scope of the list. The Opinions further emphasize the need to scientifically define market‑access rules, adopting a “relaxed entry, stringent regulation” approach: opening up sectors characterized by robust competition and substantially reducing entry barriers for business entities. In addition, the document outlines measures to progressively ease market‑access restrictions in the service sector, improve the market‑access environment for new business models and emerging fields, and intensify pilot programs aimed at further liberalizing market access.

Key energy sectors are set to undergo large-scale equipment upgrades, with the central government stepping up fiscal, tax, and financial policy support.
According to a notice posted on the website of the National Development and Reform Commission on August 21, the General Office of the NDRC and the Comprehensive Department of the National Energy Administration recently issued the “Implementation Plan for Large-Scale Equipment Upgrading in Key Energy Sectors,” outlining seven priority tasks and setting forth three sets of supporting measures.
The Plan proposes advancing the upgrading and circular utilization of photovoltaic equipment, supporting grid‑integration upgrades for photovoltaic power plants, and promoting the development of technologies for the recycling, treatment, and reuse of photovoltaic modules. It also supports research and development of low‑cost, environmentally friendly dismantling methods—both physical and chemical—as well as high‑efficiency, eco‑friendly separation technologies for high‑value components, along with the corresponding complete sets of equipment. In terms of safeguard measures, the Plan calls for strengthening policy support in fiscal, tax, and financial areas. Specifically, it seeks to increase funding for equipment upgrades and technological renovations in key energy sectors, enhance coordination between banks and enterprises, guide financial institutions to bolster support for such initiatives, make effective use of re‑lending and fiscal interest subsidies, and expand medium- and long‑term lending to the manufacturing sector.

The Cyberspace Administration of China and the Ministry of Industry and Information Technology have jointly issued six tasks to boost IPv6 traffic in key cities.
On August 21, China Internet Information Office issued the “Notice on the Issuance of the Work Plan for the Special Campaign to Increase IPv6 Traffic in Key Cities Nationwide.”
The Work Plan outlines six key tasks: (1) Conduct in-depth analysis of IPv6 network traffic; (2) Promote large-scale internet applications to significantly increase IPv6 traffic; (3) Enhance IPv6 connectivity on home‑end devices; (4) Accelerate the widespread adoption and use of IPv6 across government and enterprise entities; (5) Strengthen the IPv6 upgrade and transformation of data centers; and (6) Improve the IPv6 service capabilities of cloud‑service platforms. The Work Plan specifies that data center IPv6 network access capacity must be enhanced, with all outbound links fully enabled for IPv6, while actively guiding and supporting data center users in activating IPv6 services; furthermore, it calls for encouraging all application services hosted in data centers to support and enable IPv6, thereby increasing the share of IPv6 traffic on data center egress links.

The National Development and Reform Commission has issued two recommended health industry standards, including the “Standards for the Establishment of Palliative Care Units for the Elderly.”
The National Development and Reform Commission has published the “Notice on the Issuance of Two Recommended Health Industry Standards, Including the ‘Standards for the Establishment of Palliative Care Units for the Elderly,’” which will take effect on February 1, 2025.
This batch of published recommended hygiene industry standards includes the “Standards for the Establishment of Palliative Care Units for Older Adults” and the “Standards for Bed Transfers Between the Residential and Medical Areas in Integrated Medical–Elderly Care Facilities.” Among these, the “Standards for the Establishment of Palliative Care Units for Older Adults” sets forth the basic requirements for establishing such units, including staffing, bed capacity, equipment provisions, and quality‑management criteria, and applies to palliative care units for older adults in medical institutions at all levels as well as in integrated medical–elderly care facilities.

The State Administration for Market Regulation has released the 2023 Annual Report on Price Supervision and Inspection and Anti-Unfair Competition Enforcement in China.
Recently, the State Administration for Market Regulation released the “Annual Report on Price Supervision and Enforcement and Anti-Unfair Competition Enforcement in China (2023),” which covers a work overview, price‑related regulatory enforcement, fee‑related regulatory enforcement, anti‑unfair competition enforcement, regulation of direct selling, enforcement against pyramid schemes, local initiatives, and a chronology of major events.
The report shows that in 2023, market regulation authorities at all levels investigated and handled a total of 2,401 cases involving illegal fees imposed on enterprises, imposing fines and confiscations totaling RMB 430 million and refunding enterprises RMB 2.16 billion; they also investigated and handled 12,496 cases of various forms of unfair competition, with fines and confiscations amounting to RMB 582 million.

The Beijing Municipal Government plans to issue a document to strengthen the investigation and handling of production safety accidents.
On August 20, the Beijing Municipal Government website published the “Notice on Soliciting Public Comments on the ‘Opinions on Strengthening the Investigation and Handling of Production Safety Accidents (Draft for Comments)’,” with a deadline for submitting feedback set for September 20.
The “Opinions” comprise nine sections and thirty-one items, comprehensively standardizing accident investigation and handling across the entire process—covering organization of investigations, coordination and cooperation, evidence collection, accountability, corrective measures and preventive safeguards, as well as requirements for investigative work and mechanisms for organizational implementation. They further elaborate on such specific provisions as the chief‑investigator responsibility system, the operational procedures of investigation teams, protection of the accident scene, evaluation of emergency response, analysis of the causes and nature of accidents, and measures for rectification and prevention, among others.

Decision to Continue Tariffs: The EU Announces the Final Ruling in Its Anti-Subsidy Investigation into Chinese Electric Vehicles; Ministry of Commerce Responds.
On August 20, local time, the European Commission disclosed to interested parties a draft decision to impose definitive anti-subsidy duties on pure electric vehicles imported from China, with minor adjustments to the proposed tariff rates.
Specifically: BYD 17.0%, Geely 19.3%, SAIC Group 36.3%, other partner companies 21.3%, and all other non‑partner companies 36.3%. The European Commission has decided to apply a separate customs duty rate to Tesla as a Chinese exporter, set at 9% for the time being, and has also opted not to impose retroactive countervailing duties. Interested parties may promptly request a hearing from the European Commission’s services and submit their comments within 10 days. The European Commission will issue its final decision by November 4.
China’s Ministry of Commerce responded by stating that the EU’s recently published final ruling fails to adequately incorporate China’s views, continues to uphold flawed practices, and distorts the investigation’s findings. This final ruling is based on the EU’s unilateral determination of “facts,” rather than on facts jointly recognized by both sides, a position that China officely opposes and regards with grave concern. China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.

China has issued its first set of regulations on the supervision of professional title evaluations, comprehensively strengthening oversight throughout the entire evaluation process.
On August 19, the website of the Ministry of Human Resources and Social Security published the Interim Measures for the Supervision of Professional Title Evaluation. According to reports, this is the first regulatory document on professional title evaluation issued at the national level.
The Measures comprise four chapters and 27 articles, covering general provisions, regulatory content, regulatory methods, and regulatory measures. They focus on three key groups—applicants, review experts, and personnel involved in professional title evaluation—and two key entities—evaluation bodies and the applicants’ employing units—employing a variety of approaches to oversight. With respect to applicant oversight, the measures address such practices as falsifying information in applications, submitting false documents, commissioning or engaging in plagiarism for academic papers, and engaging in underhanded manipulation during the professional title application and review process. The Measures explicitly establish a system of integrity pledges for professional title applications: applicants must sign a personal commitment upon submitting their application materials, afofficeing the authenticity of all submitted documentation; those who make false commitments will be barred from applying for or undergoing professional title evaluation for a period of three years.

The National Development and Reform Commission plans to revise the Measures for Energy Conservation Review of Fixed Asset Investment Projects.
On August 21, the National Development and Reform Commission published on its website an announcement soliciting public comments on the “Measures for Energy Conservation Review of Fixed Asset Investment Projects (Draft for Public Comment).” The deadline for submitting feedback is September 20.
Following its revision, the Measures comprise six chapters and 33 articles, covering general provisions, management responsibilities, energy‑conservation review, supervision and administration, legal liabilities, and supplementary provisions. The key revisions address the following areas: first, the establishment of a dynamic adjustment mechanism for energy‑conservation review authority; second, the strengthening of evaluation and management of project energy consumption and carbon emissions; and third, the reinforcement of ongoing and post‑review oversight of energy‑conservation reviews.

Five departments have issued the “Comprehensive Governance Action Plan for the Inspection and Testing Sector.”
On August 20, the website of the State Administration for Market Regulation published the “Notice on Issuing the Comprehensive Governance Action Plan for the Inspection and Testing Sector.”
The Action Plan specifies that efforts will focus on addressing prominent issues—such as falsification of inspection and testing results, illegal business practices, and corruption—related to food safety, special equipment, transportation, construction, and the environment, covering areas “on the tip of the tongue,” “under the wheels,” and “beneath the eaves.” A five-month targeted rectification campaign, including follow-up reviews, will be launched. Any deliberate issuance of false or misleading reports, or other serious violations of laws and regulations, will be met with strict and severe penalties upon verification; where revocation or suspension of relevant qualifications is warranted, such measures will be resolutely imposed in accordance with the law; and cases suspected of criminal offenses will be promptly referred to the judicial authorities for prosecution and criminal accountability.

Ministry of Natural Resources: Protect and sustainably utilize natural resources, and steadily advance the building of a Beautiful China.
Recently, the website of the Ministry of Natural Resources published the “Implementation Opinions on Protecting and Sustainably Utilizing Natural Resources to Solidly Advance the Building of a Beautiful China.”
The “Implementation Opinions” comprise seven areas and 28 specific measures, clearly stipulating the need to accelerate the formulation and revision of laws and regulations, including the Law on Territorial Spatial Planning, the Law on Mineral Resources, the Law on Farmland Protection and Quality Enhancement, the Law on Real Estate Registration, the National Parks Law, as well as implementing rules for the Law on Mineral Resources, the Regulations on Nature Reserves, the Regulations on Scenic and Historic Areas, and the Implementing Rules of the Forest Law. It also calls for sustained efforts to advance the development of legal and institutional frameworks related to national natural resources oversight, to refine the unified system for surveying, evaluating, and monitoring natural resources, to improve the property rights and management systems for natural resource assets, and to establish a sound system of territorial spatial use control and planning permits.

The Ministry of Agriculture and Rural Affairs has issued a document to plan and stockpile major agricultural and rural projects, while deepening financing matchmaking services.
Recently, the Chinese Government Website released the “Notice on Strengthening the Planning and Reserve of Major Agricultural and Rural Projects and Deepening Financing Coordination Services.”
The Notice comprises four key areas and explicitly calls for intensifying financing‑matching services, enriching the project pipeline through targeted, tiered approaches, strengthening communication and coordination with financial institutions, and bolstering organizational implementation and safeguards. It stipulates that local authorities should proactively create favorable conditions to encourage financial institutions to align with dedicated credit policies, innovate products, services, and financing models, and independently conduct project appraisal and lending in accordance with market‑based principles, thereby increasing support. Non‑bank financial institutions, including securities offices, fund managers, and financial leasing companies, are encouraged to enhance comprehensive financial services for projects on the designated list within their respective business scopes. Furthermore, the national agricultural guarantee system is directed to remain officely committed to its policy‑oriented mandate and prioritize providing credit‑guarantee services for critical agricultural products such as grain, soybeans, and oilseed crops.

The Ministry of Commerce has initiated an anti-subsidy investigation into certain imported dairy products originating in the European Union.
On August 21, the Ministry of Commerce website published the “Notice on Initiating an Anti-Subsidy Investigation into Certain Dairy Products Imported from the European Union.”
The Notice clarifies that, effective August 21, 2024, the Ministry of Commerce has decided to initiate an anti-subsidy investigation into certain dairy products originating in the European Union. The investigation will primarily focus on the following subsidy schemes: (1) subsidies under the EU’s Common Agricultural Policy; and (2) subsidies implemented by EU member states. Interested parties and governments of interested countries or regions are required to register with the Trade Remedy Investigation Bureau of the Ministry of Commerce within 20 days from the date of this Notice to participate in the anti-subsidy investigation. The investigation will commence on August 21, 2024, and is generally expected to conclude by August 21, 2025; in exceptional circumstances, the period may be extended by up to six months.

The Ministry of Transport has revised the Measures for the Licensing of Railway Locomotive and Rolling Stock Drivers.
On August 20, the website of the Ministry of Transport published the Measures for the Licensing of Railway Locomotive and Rolling Stock Drivers, which will take effect on December 1, 2024.
The Measures comprise seven chapters and forty-three articles. The main revisions adjust the scope of driver qualification licensing, streamline the categories of vehicles authorized for operation and the application requirements, and introduce additional safety management obligations for railway enterprises and drivers. Notably, the Measures stipulate that the National Railway Administration shall implement a system of competency assessments and professional qualification grading for drivers, while strengthening ongoing and post‑licensing oversight. Furthermore, when railway regulatory authorities identify situations in which a licensed driver is prohibited from operating railway locomotives or rolling stock, or where violations of railway operational safety regulations pose a safety risk, they shall order corrective action and require the driver to rectify the issue. Only after completing such rectification and passing a subsequent inspection by the railway regulatory authority may the driver resume duty.

The Ministry of Transport has revised the Regulations on the Administration of Special-Purpose Equipment at Civil Airports.
On August 20, the Ministry of Transport’s website published the “Regulations on the Administration of Specialized Equipment for Civil Airports,” which will take effect on November 1, 2024.
The Regulations stipulate that the Civil Aviation Administration of China (CAAC) shall implement catalog-based management of airport equipment, with the CAAC publishing the catalog through official announcements. They also specify the circumstances under which equipment must be recalled: when a safety‑critical defect attributable to manufacturing causes a hazard, the manufacturer shall immediately cease production and initiate a voluntary recall. Furthermore, the Regulations set out the methods for conducting recalls, requiring manufacturers and operators to promptly take corrective or supplementary measures—such as revising or adding labels, repairing, replacing, or accepting returns—to eliminate the identified defects. In addition, the Regulations introduce enhanced oversight requirements for the equipment‑operation phase, enumerate situations in which new inspection applications may not be submitted, outline procedures for inspecting newly developed airport equipment, adjust the inspection regime for imported airport equipment, standardize acceptance criteria for the delivery and commissioning of airport equipment, and establish requirements for periodic assessments of such equipment, among other provisions.

The Ministry of Transport has issued the “Technical Standards for Highway Administration.”
On August 21, the website of the Ministry of Transport published the “Announcement on the Issuance of the Technical Standards for Highway Administration.”
The Standard consists of eight chapters, namely: 1. General Provisions; 2. Terms and Definitions; 3. Road Asset Protection; 4. Management of Road‑Related Construction Activities; 5. Management of Permits for Transport of Oversized and Overweight Cargo; 6. Governance of Illegal Over‑Dimension and Over‑Weight Transportation; 7. Supporting Conditions; and 8. Information‑Based Management. It applies to road asset protection, the management of road‑related construction activities, the administration of permits for oversized and overweight cargo transport, the governance of illegal over‑dimension and over‑weight transportation, as well as the requirements for supporting conditions and information‑based management on expressways and first‑ to fourth‑class highways.

Eight departments have issued guidelines to ensure the proper replacement of power batteries in aging new-energy urban buses.
On August 20, the website of the Ministry of Industry and Information Technology published the “Notice on the Safe and Orderly Replacement of Power Batteries in Aging New-Energy City Buses.”
The Notice clarifies that the replacement of power batteries in new‑energy urban buses shall be carried out only under the condition of ensuring the overall vehicle safety. Operators of new‑energy urban bus services and providers of battery‑replacement services must possess legal person status and, in accordance with the principle of “whoever advocates bears responsibility; whoever performs the replacement bears responsibility,” rigorously fulfill their principal safety responsibilities.

The Ministry of Industry and Information Technology plans to issue three mandatory national standards, including the “Evaluation Method and Indicators for Fuel Consumption of Passenger Vehicles.”
On August 21, the website of the Ministry of Industry and Information Technology published a notice soliciting public comments on three mandatory national standards, including “Evaluation Methods and Indicators for Fuel Consumption of Passenger Vehicles.” The deadline for submitting feedback is October 20.
The mandatory national standards issued in the “Opinions” primarily include “Evaluation Methods and Indicators for Fuel Consumption of Passenger Vehicles,” “Limit Values for Energy Consumption of Electric Vehicles—Part 1: Passenger Vehicles,” and “Safety Technical Specifications for Three-Wheeled Motor Vehicles.”

The Shanghai Administration for Market Regulation has revised and refined the catalog of industrial product production license management.
On August 21, the Shanghai Administration for Market Regulation published on its website the “Notice on Implementing Relevant Measures to Adjust and Improve the Catalogue of Industrial Product Production License Management.”
The Notice clarifies that industrial product production licensing will be applied to six categories of products—cold‑rolled ribbed steel bars, bottled liquefied petroleum gas pressure regulators, wire ropes, plywood, fine carpentry boards, and safety helmets—and that a “permit first, license later” approval procedure will be implemented. Enterprises must apply for a production license in accordance with the detailed rules governing its issuance. Effective September 25, 2024, any enterprise that has not obtained an industrial product production license shall be prohibited from manufacturing the aforementioned products. Enterprises that have obtained production licenses for these six product categories must, within six months from the date of approval, affix the production license mark and number on their products, packaging, or instruction manuals; failure to comply with this requirement will result in a prohibition on the sale of such products.

The State Administration for Market Regulation plans to issue the “Regulations on Evidence in Trademark Administrative Enforcement.”
On August 19, the website of the State Administration for Market Regulation published the “Notice on Public Solicitation of Comments on the ‘Regulations on Evidence in Trademark Administrative Enforcement (Draft for Comments)’,” with a deadline for submitting feedback set for September 18.
The Regulations comprise twenty-four articles, primarily defining the types of evidence and setting forth specific requirements for the collection of each type. They also clarify matters such as the admissibility of evidence directly established by the parties, the acceptance of evidence from other authorities, the evidentiary weight of evidence acknowledged by one party, the probative value of evidence in different circumstances, the review of identification opinions, and the handling of inconsistencies in a party’s statements.

The Beijing Municipal Government plans to issue the “Notice on Classified and Graded Management of Fire Safety Acceptance Filing for Construction Projects.”
On August 20, the Beijing Municipal Government website published the “Notice on Public Solicitation of Comments on the ‘Notice on Classified and Graded Management of Fire Safety Acceptance Filing for Construction Projects (Draft for Comments)’,” with the deadline for submitting feedback set for August 26.
The Notice comprises six sections, covering project classification, tiered management, procedures related to the notification‑and‑commitment system for fire‑safety acceptance filing, exemption from fire‑safety acceptance filing for projects not requiring fire‑design review, stringent legal implementation of fire‑safety acceptance for special construction projects, and relevant requirements. The key contents are as follows.

The Shanghai Administration for Market Regulation has issued the “Shanghai Implementation Guidelines for the Management of Allergenic Substances in Food Production Processes.”
On August 19, the Shanghai Administration for Market Regulation published on its website the “Notice on Issuing the ‘Shanghai Implementation Guidelines for the Management of Allergenic Substances in Food Production Processes.’”
The Guidelines stipulate that enterprises shall comprehensively identify potential allergenic substances throughout the production process to ensure the implementation of targeted management measures. Food manufacturers must apply preventive and control measures to identified allergens to prevent and mitigate health risks to consumers. Furthermore, food producers are required to establish and maintain a robust management system for food allergens, encompassing allergen identification, formulation management, supplier oversight, incoming‑material inspection, control of cross‑contamination during production, label management, transportation protocols, cleaning procedures, and allergen recall management. This allergen management system should be integrated into broader food safety management frameworks such as HACCP. Based on specific operational needs, enterprises may also develop additional hazard‑assessment mechanisms—such as monitoring allergen levels, assessing distribution uniformity, and establishing risk‑grading criteria—to further reduce health risks posed by allergens to consumers.

Shanghai plans to issue the “Measures of Shanghai Municipality on Promoting Enterprise Standardization.”
On August 19, the Shanghai Administration for Market Regulation published on its website a notice soliciting public comments on the “Measures of Shanghai Municipality for Promoting Enterprise Standardization (Draft).” The deadline for submitting feedback is September 18.
The Measures consist of twenty-two articles and primarily cover the following areas: legal basis, scope of application, principal responsibilities, division of administrative duties, general requirements, formulation procedures, public disclosure of enterprise standards, implementation of enterprise standards, evaluation of implementation, joint development of enterprise standards, joint enterprise standards in the Pudong New Area, standard-setting by other entities, standardization work for foreign-invested enterprises, the “Enterprise Standard Leader” initiative, cultivation of “Shanghai Standards,” promotion of internationalization, digitalization-driven initiatives, the position of Chief Standardization Officer in enterprises, tiered cultivation of standard‑innovative enterprises, financing and credit enhancement, and oversight and management.

State Council Executive Meeting: Approved the revised Negative List for Foreign Investment Access and adopted multiple measures to support the development of specialized, refined, distinctive, and innovative SMEs.
At its meeting on August 19, the State Council Executive Meeting reviewed and approved the “Special Management Measures for Foreign Investment Access (Negative List) (2024 Edition)” and deliberated policy measures to promote the high-quality development of specialized, refined, distinctive, and innovative small and medium-sized enterprises.
The meeting noted that it is necessary to enhance the level of liberalization and facilitation of trade in services, fully implement the negative list for cross-border trade in services, and advance comprehensive pilot programs to further open up the service sector. Further measures should be taken to relax market access for foreign investment, comprehensively remove restrictions on foreign investment in the manufacturing sector, and promptly push forward the opening-up of service sectors such as telecommunications, education, and healthcare. In response to the new landscape, policies for attracting foreign investment must be refined, with more pragmatic measures introduced to improve the business environment and other related areas. The meeting also emphasized the need to vigorously foster and develop specialized, sophisticated, distinctive, and innovative small and medium-sized enterprises, strengthen policy coordination across fiscal, tax, financial, technological, industrial, and talent domains, and provide end-to-end support for enterprises’ innovation and development.

Taxation
The China Securities Regulatory Commission has released its 2023 Audit Analysis Report, targeting a range of audit-related issues.
Recently, the China Securities Regulatory Commission released the “2023 Audit Analysis Report on Listed and Over-the-Counter Companies.” The report primarily covers the basic profiles of accounting offices, the audit practices of listed and over-the-counter companies, an analysis of audit reports, and related issues in professional practice.
The Report indicates that the number of accounting offices has declined, while securities‑related business at small and medium‑sized offices has increased; the average audit fees for listed companies have fallen, whereas those for over‑the‑counter (OTC) companies have risen. With regard to issues in securities‑related auditing, the Report identifies three categories of financial‑fraud‑related audit concerns: inadequate identification and response to revenue fraud, inadequate identification and response to asset fraud, and inadequate identification and response to expense fraud. It also highlights two types of challenges in overseas audits: insufficient verification of overseas assets and failure to appropriately perform group‑level audit procedures. Furthermore, internal‑control audits reveal three main shortcomings: failure to adequately identify internal‑control deficiencies, failure to properly execute audit procedures related to internal controls, and failure to appropriately assess the materiality of such deficiencies.

Beijing, Shanghai, and Shenzhen have, for the first time, jointly issued certificates of stamp tax payment for securities transactions.
Recently, the financial and tax authorities of Beijing, Shanghai, and Shenzhen—specifically, the Third Tax Sub‑bureau of Shenzhen, the Xicheng District Taxation Bureau of Beijing, and the Third Tax Sub‑bureau of Shanghai—collaborated via a taxpayer‑administration interaction platform to conduct cross‑provincial cooperation. For the first time, they enabled the National Council for Social Security Fund to submit applications for the issuance of securities transaction stamp tax payment certificates, with simultaneous document review and certificate issuance.
Taxpayers need only submit a request to any tax authority in Beijing, Shanghai, or Shenzhen to print their tax payment certificates. This enables the electronic circulation of supporting documents and online review. After the tax authorities in the three cities verify the amount of securities transaction stamp duty and conoffice the taxpayer’s identity via remote video link, they issue the tax payment certificate separately and provide mail‑delivery services, thereby truly realizing cross‑location processing, assistance with filing, and delivery of results by post.

LITIGATION & ARBITRATION
The Supreme People’s Procuratorate and the Ministry of Public Security have jointly released typical cases of crimes involving fraudulently obtaining export tax rebates.
On August 23, the Supreme People’s Procuratorate and the Ministry of Public Security jointly released “Typical Cases of Criminal Punishment for Fraudulent Obtaining of Export Tax Rebates in Accordance with the Law.”
This batch of typical cases comprises four instances and exhibits the following key characteristics: First, it underscores a stringent crackdown on the crime of fraudulently obtaining export tax rebates. Enterprises found guilty of such offenses have been imposed hefty fines, while perpetrators whose crimes are particularly grave have been sentenced to life imprisonment and stripped of their political rights for life, in accordance with the law. Second, it reflects a comprehensive, end-to-end approach to combating this type of crime. Third, it demonstrates meticulous and accurate identification of criminal liability. By precisely determining, in accordance with the law, whether the offense involves corporate or individual liability, as well as distinguishing between principal and secondary offenders and quantifying the amount involved, the authorities rigorously safeguard the factual basis, evidentiary standards, legal application, and procedural compliance, thereby ensuring the quality of case handling. Fourth, it embodies a criminal policy that balances leniency with severity. On the basis of a thorough ascertainment of the facts, the authorities accurately differentiate the roles and statuses of suspects and defendants within joint offenses, applying legally prescribed distinctions and treatments according to the gravity of each case.

The Supreme People’s Procuratorate and the Ministry of Natural Resources have jointly released typical cases to address the difficulties in handling illegal constructions.
On August 22, the Supreme People’s Procuratorate website published a typical case of administrative non-litigious enforcement supervision in the field of land law enforcement and the confiscation and disposal of illegally constructed buildings and structures, jointly issued with the Ministry of Natural Resources.
This batch comprises four typical cases. A spokesperson for the Supreme People’s Procuratorate stated that, to address the bottleneck in the disposal of illegally constructed buildings in the field of land‑related law enforcement, it is necessary to further strengthen principal responsibility, clarify and standardize the procedures for receipt and disposition, and, on the basis of thorough assessments regarding compliance with relevant regulations and the potential for reuse, promptly order the demolition of structures that do not meet the requirements, legally confiscate those that are not suitable for demolition, and, for those that do comply, have the competent authorities carry out categorized handling in accordance with their respective duties and divisions of labor, thereby ensuring that powers are properly exercised, responsibilities are fully assumed, and law enforcement is effectively implemented.

The Supreme People’s Court has issued a judicial interpretation on disputes involving punitive damages in food and drug cases.
On August 21, the Supreme People’s Court held a press conference to release the “Interpretation on Several Issues Concerning the Application of Law in Adjudicating Cases Involving Punitive Damages for Food and Drug Safety,” along with a set of typical cases involving punitive damages for food safety violations.
The Interpretation comprises 19 articles, setting forth provisions on safeguarding the rights and interests of ordinary consumers, refund and restitution of food and drugs, the liability of purchasing agents, the responsibilities of small-scale workshops, the determination of defects in labels and instruction manuals, the concurrent application of punitive damages, liability for the production and sale of counterfeit or substandard drugs, the calculation base for punitive damages, the regulation of repeated purchases followed by claims and of recurring claims, as well as the punishment of unlawful claims. The Interpretation clarifies that, for ordinary consumers, the actual price paid shall serve as the basis for calculating punitive damages; it establishes rules governing refunds and the restitution of food and drugs; and it specifies which violations of food safety standards give rise to liability for punitive damages, among other matters.

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