JC Master Legal News Issue 810

Key Takeaways for This Issue

The China Securities Regulatory Commission is soliciting public comments on amendments to the “Several Opinions on Reforming, Improving, and Strictly Implementing the Delisting System for Listed Companies.”
On March 2, 2018, the China Securities Regulatory Commission (CSRC) publicly sought comments on amendments to the “Several Opinions on Reforming, Improving, and Strictly Implementing the Delisting System for Listed Companies.” According to the document, the revised delisting regime encompasses 24 circumstances, categorized into mandatory delisting and voluntary delisting.
The General Offices of the CPC Central Committee, the State Council, and the Central Military Commission have issued the “Notice on Carrying Out the Review and Cleanup of Laws and Regulations on Military-Civilian Fusion Development.”
Recently, the General Offices of the CPC Central Committee, the State Council, and the Central Military Commission issued the “Notice on Carrying Out the Review and Streamlining of Laws and Regulations on Military-Civilian Fusion Development,” laying out a comprehensive plan for this review. The notice specifies the scope of the review and sets forth 14 criteria across four key areas.
The Ministry of Finance and the State Taxation Administration have jointly issued the “Notice on Relevant Issues Concerning the Recognition and Administration of Tax-Exempt Status for Non-Profit Organizations.”
Recently, the Ministry of Finance and the State Taxation Administration jointly issued the “Notice on Relevant Issues Concerning the Recognition and Administration of Tax-Exempt Status for Non-Profit Organizations.” The notice primarily sets forth provisions regarding the criteria for recognizing non-profit organizations, the reviewing authorities, the procedures for obtaining such status, and the circumstances under which it may be revoked.
The General Office of the CPC Central Committee and the General Office of the State Council have issued the “Opinions on Several Issues Concerning Strengthening Reform and Innovation in the Field of Intellectual Property Adjudication.”
Recently, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Opinions on Several Issues Concerning Strengthening Reform and Innovation in the Field of Intellectual Property Adjudication.” The document sets out, in broad terms, the fundamental principles and objectives of the reform, and outlines specific measures to improve the intellectual property litigation system, strengthen the development of the intellectual property court system, and enhance the capacity of the intellectual property adjudication workforce.
A press conference was held to announce the convening of the First Session of the 13th National People’s Congress.
The First Session of the 13th National People’s Congress held a press conference at 11:00 a.m. on March 4 in the Press Hall of the Great Hall of the People, during which Spokesperson Zhang Yesui fielded questions from Chinese and foreign journalists on the session’s agenda and matters related to the work of the NPC. His responses primarily addressed constitutional amendments, China’s development model, the reform of the national supervision system, taxation, and other issues.

Table of Contents
Table of Contents

Finance & Capital Markets

The China Securities Regulatory Commission is soliciting public comments on amendments to the “Several Opinions on Reforming, Improving, and Strictly Implementing the Delisting System for Listed Companies.”
The China Securities Regulatory Commission has further clarified the policy that links the lock-up period for shares of companies invested in by venture capital funds to the investment term in an inverse manner.
The China Securities Regulatory Commission has issued the “Guidelines for Target‑Date Pension Mutual Funds (Trial).”
The China Securities Regulatory Commission has issued the “Guidelines on Information Reporting for Regional Equity Markets (Trial).”
CIRC: Pilot Implementation of Five Rules for Asset–Liability Management Supervision

Corporate & Commercial

The General Offices of the CPC Central Committee, the State Council, and the Central Military Commission have issued the “Notice on Carrying Out the Review and Cleanup of Laws and Regulations on Military-Civilian Fusion Development.”
At a press conference, the Taiwan Affairs Office of the State Council introduced the “Several Measures to Promote Cross-Strait Economic and Cultural Exchanges and Cooperation.”
People’s Daily features a full-page report on blockchain.
The Ministry of Industry and Information Technology has issued the “Notice of the National Leading Group for Building a Manufacturing Powerhouse on the Establishment of a Special Task Force on the Industrial Internet.”

Taxation

The Ministry of Finance and the State Taxation Administration have jointly issued the “Notice on Relevant Issues Concerning the Recognition and Administration of Tax-Exempt Status for Non-Profit Organizations.”
The State Taxation Administration has issued the “Opinions on Launching the 2018 Spring Breeze Campaign to Facilitate Tax Services.”

Litigation & Arbitration

The General Office of the CPC Central Committee and the General Office of the State Council have issued the “Opinions on Several Issues Concerning Strengthening Reform and Innovation in the Field of Intellectual Property Adjudication.”
The Ministry of Environmental Protection has issued the “Opinions on Legal Application Issues Concerning the Illegal Act of Commencing Construction Prior to Approval” for construction projects.

Other
A press conference was held to announce the convening of the First Session of the 13th National People’s Congress.
The first energy blockchain application has been implemented, promoting the interconnection and sharing of clean energy.

Finance & Capital Markets

The China Securities Regulatory Commission is soliciting public comments on amendments to the “Several Opinions on Reforming, Improving, and Strictly Implementing the Delisting System for Listed Companies.”
On March 2, 2018, the China Securities Regulatory Commission (CSRC) publicly sought comments on amendments to the “Several Opinions on Reforming, Improving, and Strictly Implementing the Delisting System for Listed Companies” (hereinafter referred to as the “Opinions”). According to the content of the Opinions, the revised delisting criteria now encompass 24 categories, divided into mandatory delisting and voluntary delisting. The key amendments to the Opinions are as follows:
First, the decision-making responsibility of the Shanghai and Shenzhen Stock Exchanges for enforcing mandatory delisting of companies committing serious violations has been strengthened. A new provision has been added, explicitly stipulating that “if a listed company engages in fraudulent issuance, material violations of information disclosure requirements, or other serious illegal acts, the stock exchange shall, in strict accordance with the law, make a decision to suspend or terminate the listing of the company’s shares. The stock exchange shall also formulate rules governing the suspension and termination of listing for listed companies due to serious violations.” At the same time, given that a listed company’s commission of a serious violation constitutes one of the circumstances under which the stock exchange may order delisting as prescribed by the Securities Law, and that this revision to the “Delisting Opinions” further clarifies the stock exchange’s principal responsibility for making delisting decisions in cases of serious violations, the previously existing provisions specifying the particular circumstances under which a listed company would be suspended or delisted for fraudulent issuance or material information‑disclosure violations—along with the corresponding exceptions to delisting, procedures for resuming listing, and re‑listing—have been deleted. In subsequent work, the stock exchanges will develop detailed implementation rules to define the criteria, procedures, and other relevant matters for suspending or terminating the listing of listed companies on the grounds of serious violations, thereby ensuring the rigorous enforcement of the mandatory delisting regime for serious violations.
Second, arrangements have been made to draw a clear distinction between old and new cases. For listed companies that, prior to the entry into force of the new regulations, had already been determined to have committed material violations or had been lawfully referred to the public security authorities and subject to a decision to delist, the original provisions shall apply. Except in the aforementioned circumstances, any suspension or delisting of a listed company arising from material violations that occurred before the new regulations took effect shall be governed by the new regulations.
While refining the delisting regime for material violations, we will further strengthen enforcement against companies that fail to meet delisting financial criteria—such as those with severely deteriorated financial conditions, persistent losses, or those classified as “zombie enterprises”—to encourage listed companies to continuously improve their operations and management, enhance the quality of information disclosure, and elevate corporate governance, thereby solidifying the foundations for sustainable development and supporting supply-side structural reform.

The China Securities Regulatory Commission has further clarified the policy that links the lock-up period for shares of companies invested in by venture capital funds to the investment term in an inverse manner.
On March 2, 2018, the China Securities Regulatory Commission issued the “Special Provisions on Share Reduction by Shareholders of Venture Capital Funds in Listed Companies.” On the same day, the Shanghai Stock Exchange and the Shenzhen Stock Exchange respectively released the “Detailed Rules for the Implementation of Share Reduction by Shareholders of Venture Capital Funds in Listed Companies” and the “Detailed Rules for the Implementation of Share Reduction by Shareholders of Venture Capital Funds in Listed Companies of the Shenzhen Stock Exchange,” which were scheduled to take effect on June 2, 2018.
The reverse‑linkage policy has four key features: First, to guide venture capital funds to provide targeted support for entrepreneurship and innovation, the policy applies only after the early‑stage SMEs or high‑tech enterprises in which the fund has invested complete their initial public offering. Second, to encourage greater engagement by venture capital funds in supporting entrepreneurship and innovation, the policy is available only when the combined share of investments in “early‑stage SMEs” and “high‑tech enterprises” reaches at least 50%. In addition, in light of practical considerations, different eligibility criteria are applied to venture capital funds depending on whether they were established before or after the policy’s issuance. Third, to promote long‑term and value‑oriented investing, the policy sets a 36‑month investment holding period as the threshold, thereby effectively linking the post‑lockup phase with the length of the investment horizon. Fourth, to facilitate exit strategies for venture capital funds while minimizing market disruption, the policy adjusts the pace of share reductions in both centralized bidding and block‑trade transactions; meanwhile, the prescribed reduction ratios and the minimum holding periods for block‑trade acquirers remain unchanged, helping to prevent large‑scale “concentrated sell‑offs” or “bridge‑financing‑driven” disposals.
Specifically, the Shanghai Stock Exchange’s implementation rules, on the one hand, differentiate between venture capital funds based on their investment horizons, establishing a mechanism that links the investment period to the post‑IPO share‑sale restriction period in an inverse manner. For investments held for less than 36 months prior to a company’s IPO, the existing share‑sale regulations apply; for investments spanning 36 to 48 months, the time window for compliance with the current sale‑ratio limits—1% for block trades and 2% for bulk transactions—is shortened from any consecutive 90 days to 60 days; and for investments exceeding 48 months, this window is further reduced from any consecutive 90 days to 30 days. On the other hand, to ensure the stability of the regulatory framework and mitigate the market impact of share sales by venture‑capital fund shareholders, the Implementation Rules do not alter the existing requirements regarding disclosure of sale information, sale ratios, or the holding‑period threshold for block‑trade acquirers.
The Shenzhen Stock Exchange’s detailed rules stipulate that, for eligible venture capital fund shareholders, if the investment period in early-stage small and medium-sized enterprises or high-tech enterprises has reached at least 36 months but is less than 48 months, the total number of pre-IPO shares they may reduce through centralized bidding transactions within any consecutive 60 calendar days shall not exceed 1% of the company’s total shares, and the total number of pre-IPO shares they may reduce through block trades within any consecutive 60 calendar days shall not exceed 2% of the company’s total shares. If the investment period has reached 48 months or longer, the total number of pre-IPO shares they may reduce through centralized bidding transactions within any consecutive 30 calendar days shall not exceed 1% of the company’s total shares, and the total number of pre-IPO shares they may reduce through block trades within any consecutive 30 calendar days shall not exceed 2% of the company’s total shares.

The China Securities Regulatory Commission has issued the “Guidelines for Target‑Date Pension Mutual Funds (Trial).”
The China Securities Regulatory Commission has officially issued the “Guidance on Pension‑Targeted Mutual Funds (Trial)” (hereinafter referred to as the “Guidance”), which shall take effect from the date of its promulgation. The Guidance was open for public consultation from November 3 to November 18, 2017, during which a total of 49 comments were received from various stakeholders. All reasonable suggestions and opinions were duly incorporated into the drafting process, notably including enhancements to the requirements for fund managers of pension‑targeted funds, refinements to the qualifications for fund managers, strengthened criteria for selecting sub‑funds within pension‑targeted funds, and the removal of specific fee‑rate caps for such funds.
Pension‑target funds have the following four key characteristics: First, in their early stages of development, they primarily operate as fund‑of‑funds, diversifying risk across major asset classes and fund managers to pursue stability. Second, they employ well‑established asset allocation strategies, carefully managing portfolio volatility to strive for long-term returns. Third, they impose a lock‑up period or a minimum holding period for investors, thereby mitigating the impact of frequent short‑term subscriptions and redemptions on the fund’s investment approach and performance. Fourth, they encourage fund managers to offer preferential fee structures, passing cost savings on to investors and supporting long‑term retirement investing.
According to the Guidelines, target‑date funds aim to achieve long-term, stable growth of retirement assets, encourage investors to hold investments for the long term, and employ mature, prudent asset allocation strategies to pursue sustained, steady appreciation. Their investment approaches include target‑date strategies, target‑risk strategies, and other strategies approved by the China Securities Regulatory Commission.

The China Securities Regulatory Commission has issued the “Guidelines on Information Reporting for Regional Equity Markets (Trial).”
Recently, the China Securities Regulatory Commission issued the “Guidance on Information Reporting for Regional Equity Markets (Trial)” (hereinafter referred to as the “Guidance”), which will take effect on July 1, 2018.
The Guidelines comprise 19 articles and six appendices. Their main contents are as follows: First, Reporting Requirements. The Guidelines adopt a categorized reporting approach, specifying the content for routine filings, periodic submissions, and reports on material events. They mandate the one-time submission of basic information on regional equity market operators, registration and settlement service providers, and intermediary institutions, as well as detailed operational procedures of the operators and self-regulatory rules. Second, Reporting Methods. The Guidelines clearly provide for two modes of submission: electronic filing and paper-based reporting. Routine filing information, periodic reporting materials, and basic operational data are to be submitted through the CSRC’s Central Regulatory Information Platform, while material events must be reported immediately in written form or other appropriate formats; other matters are to be reported in writing or by other means. Utilizing the Central Regulatory Information Platform for information submission eliminates the issue of multiple reporting channels for operators, enhances the scientific rigor of data collection, analysis, and monitoring, and upholds the principles of convenience, efficiency, and technology‑driven regulation. Third, Reporting Obligations. The Guidelines stipulate that regional equity market operators shall submit information truthfully, accurately, and comprehensively and establish a robust information‑submission management system. The CSRC’s local branches will incorporate the operators’ information‑submission practices into their oversight and assessment of regional equity markets.
IV. Supervision and Management. The Guidelines stipulate that local financial regulatory authorities are responsible for urging operating institutions to submit information, reviewing such submissions, and promptly addressing any issues identified. When CSRC branch offices discover problems, they shall notify the relevant local financial regulatory authorities to require the operating institutions to take corrective action, while providing guidance, coordination, and oversight.

CIRC: Pilot Implementation of Five Rules for Asset–Liability Management Supervision
On March 1, the China Insurance Regulatory Commission issued five regulatory rules on insurance asset–liability management, which entered into a trial implementation period effective from the date of their promulgation. The overall framework of the asset–liability management regulatory system comprises one administrative measure and five regulatory rules. The administrative measure is the Interim Measures for the Supervision of Insurance Asset–Liability Management, while the five regulatory rules primarily include capability‑assessment and quantitative‑assessment rules for property insurers and life insurers, as well as reporting rules on asset–liability management.
The comprehensive regulatory framework conducts a holistic assessment of each insurer’s asset–liability management capabilities and matching status, drawing on both qualitative and quantitative criteria. Based on the results, it implements tiered supervision, establishing a long-term mechanism that coordinates and integrates oversight of business operations, capital deployment, and solvency. The capability‑assessment rules set out regulatory standards across dimensions such as strategic objectives, organizational structure, roles and responsibilities, operational workflows, modeling systems, and performance evaluation, thereby fostering an effective positive feedback loop in insurers’ asset–liability management. Meanwhile, the quantitative assessment framework employs modeling and stress testing to evaluate, from multiple angles—including maturity structure, cost‑benefit dynamics, and cash flows—the overall alignment between an insurer’s assets and liabilities, enabling the robust identification and quantification of asset–liability mismatch risks.
The management reporting rules standardize the content, submission procedures, and independent third-party audit requirements for quarterly and annual asset–liability management reports. Following the formal implementation of the regulatory framework, the China Insurance Regulatory Commission will classify insurance companies into four categories—A, B, C, and D—based on their management capabilities and asset–liability matching. Companies in Category A, which demonstrate strong capabilities and sound matching, will receive appropriately supportive regulatory policies, while those in Categories C and D, characterized by weaker capabilities or poor matching, will be subject to targeted supervisory measures to mitigate the risk of asset–liability mismatches.

Commercial & Corporate

The General Offices of the CPC Central Committee, the State Council, and the Central Military Commission have recently issued the “Notice on Carrying Out the Review and Streamlining of Laws and Regulations Related to Military-Civilian Fusion Development.” The Notice (hereinafter referred to as the “Notice”) sets out a comprehensive plan for reviewing and streamlining the legal and regulatory framework governing military-civilian fusion development.
The Notice clarifies the scope of documents subject to review and cleanup. This includes Party regulations, laws, regulations, rules, and normative documents issued since the launch of reform and opening-up in areas with significant potential for military‑civilian integration—such as infrastructure development, defense science and technology industries, weapons and equipment procurement, talent cultivation, military logistics, and national defense mobilization—as well as in fields where military‑civilian applications are particularly extensive, including the maritime domain, outer space, cyberspace, biotechnology, new energy, and artificial intelligence.
The Notice sets forth 14 specific criteria across four key areas. First, those that no longer meet the needs of national defense and military modernization—primarily including provisions incompatible with the new leadership and management system or the joint operations command structure; those that impede the achievement of goals such as strengthening the military through science and technology and modernizing weaponry and equipment; and those that fail to comply with the requirements for implementing socialized support for the armed forces and fully discontinuing paid services. Second, those that do not align with the principle of integrated civil–military development—mainly encompassing measures in infrastructure, science and technology, industry, education, emergency response, and combat readiness that hinder coordinated planning and construction between civilian and military sectors; that obstruct the two-way flow of resources—including technology, talent, capital, and information—between civilian and military domains; that restrict the open sharing of civil–military facilities and resources developed with state investment; and that fail to incorporate national defense considerations into economic projects closely related to defense. Third, those that undermine fair competition—specifically, regulations that unduly limit the participation of leading civilian enterprises and private offices in national defense and military development in areas such as market access, information disclosure, and intellectual property protection; inappropriate classification or declassification practices that impede stakeholders’ right to know and fair participation; and provisions that are inconsistent with the new development philosophy and the building of a modernized economic system, thereby hindering the decisive role of market forces in resource allocation. Fourth, those characterized by lack of coherence or coordination among regulatory documents—namely, cases where lower-level regulations have not been revised in response to amendments to higher-level laws; obvious inconsistencies or gaps between regulations that create difficulties in inter‑agency coordination and lead to uneven implementation; overly general provisions lacking supporting and operational guidelines, making effective enforcement challenging; and regulations that, due to their age, no longer address current issues, normative matters, or administrative entities that have undergone significant changes. In accordance with these criteria, for documents falling within the scope of this review, specific recommendations are put forward, including repeal, invalidation, amendment, consolidation, declassification or reclassification, and continued validity.
The Notice requires that the entities responsible for the review shall, in accordance with the scope of the review, examine each regulatory document individually to determine whether it should be included in the review catalogue, conducting a comprehensive review with no blind spots and ensuring that all items subject to review are addressed thoroughly. It is essential to adopt an open‑door approach, soliciting broad input and recommendations from relevant departments, market entities, industry associations, and experts and scholars. A long‑term mechanism for review should be established, integrating periodic reviews with routine oversight and combining review with filing and examination. Follow‑up monitoring and inspections must be strengthened to ensure that the outcomes of the review are effectively implemented. The Central Office for Military‑Civilian Fusion will, as appropriate, conduct timely supervision and inspection of the review process.

At a press conference, the Taiwan Affairs Office of the State Council introduced the “Several Measures to Promote Cross-Strait Economic and Cultural Exchanges and Cooperation.”
On February 28, the State Council Taiwan Affairs Office and the National Development and Reform Commission, in consultation with the Central Organization Department and 27 other departments, issued and implemented the “Several Measures to Promote Cross-Strait Economic, Cultural, and Exchange Cooperation” (hereinafter referred to as the “Measures”).
A total of 31 specific measures have been introduced, 12 of which aim to accelerate the granting of equal treatment to Taiwan‑invested enterprises as to mainland‑based companies. These measures notably stipulate that Taiwan‑invested offices will enjoy the same treatment as their mainland counterparts in areas such as participation in “Made in China 2025,” access to tax incentives, involvement in national key R&D programs, infrastructure development, government procurement, and the mixed‑ownership reform of state‑owned enterprises. They also clarify policies related to land use for Taiwan‑invested enterprises, their relocation to central, western, and northeastern regions, and applicable support for Taiwan‑invested agricultural businesses. Furthermore, these measures seek to deepen financial cooperation between cross‑strait entities in areas like small‑value payments, credit information services, and syndicated lending. In addition, 19 measures are designed to progressively extend to Taiwan compatriots the same treatment as mainland residents in studying, starting businesses, finding employment, and living on the mainland. Key provisions include opening 134 national professional qualification examinations to Taiwan compatriots, providing greater convenience for them to obtain professional credentials and apply for jobs in mainland China; allowing Taiwan compatriots to apply for the “Thousand Talents Program,” the “Ten Thousand Talents Program,” and various funding initiatives; enabling their participation in projects and award programs dedicated to the inheritance and development of China’s fine traditional culture, as well as in the selection of honorary titles; facilitating their membership in professional associations and industry organizations; encouraging their engagement in grassroots work on the mainland; and relaxing market access restrictions for Taiwanese films, television productions, books, and other cultural products.
In summary, these 31 measures exhibit three key characteristics: First, they are centered on major national action plans and key national R&D projects, offering Taiwanese enterprises and compatriots the same treatment as their mainland counterparts—for example, Taiwanese‑invested offices participating in the “Made in China 2025” initiative are eligible for policies identical to those applied to mainland enterprises. Second, the measures are tailored to specific needs, with the drafting process carefully taking into account the unique circumstances and requirements of Taiwanese‑invested companies and Taiwan compatriots, addressing their widespread concerns and proposing highly targeted solutions. Third, the benefits are broad, as the measures span multiple sectors, including industry, fiscal and tax policy, land use, finance, employment, education, culture, healthcare, and film and television.

People’s Daily features a full-page report on blockchain.
On February 26, the economic section of People’s Daily published, across an entire page, three signed commentary articles on blockchain—“Three Questions About Blockchain,” “Seize the Opportunity Presented by Blockchain,” and “Become a Leader in the Digital Economy”—which warmly afofficeed blockchain’s role in reducing the cost of value transfer and unleashing productive forces.
In particular, “Three Questions About Blockchain” explains what blockchain is, what its functions are, and whether it will become the next big trend. It also points out that the technology is still far from mature, urging caution against hype and emphasizing the need to distinguish between technological innovation and fundraising‑driven innovation—avoiding the trap of pursuing blockchain for blockchain’s sake.

The Ministry of Industry and Information Technology has issued the “Notice of the National Leading Group for Building a Manufacturing Powerhouse on the Establishment of a Special Task Force on the Industrial Internet.”
Recently, in order to implement the State Council’s Guiding Opinions on Deepening the Development of the Industrial Internet under the “Internet Plus Advanced Manufacturing” Initiative, accelerate innovation and development in the industrial internet, and strengthen overall planning and policy coordination for related work, the Ministry of Industry and Information Technology, following deliberation at a meeting of the National Leading Group for Building a Manufacturing Powerhouse, issued the “Notice of the National Leading Group for Building a Manufacturing Powerhouse on the Establishment of a Special Task Force on the Industrial Internet,” deciding to establish a Special Task Force on the Industrial Internet (hereinafter referred to as the “Task Force”) under the National Leading Group.
This Notice clearly defines the primary responsibilities of the Special Task Force as coordinating and overseeing the overarching efforts to advance China’s industrial internet, reviewing major plans, policies, special projects, and key work arrangements for its development, strengthening strategic planning, guiding the work of various regions and departments, facilitating the coordination of important cross‑regional and cross‑departmental matters, and intensifying oversight and inspection of the implementation of critical initiatives. The Special Task Force convenes annually, with the Chair or a designated Vice‑Chair calling meetings to deliberate on major issues related to the development of the industrial internet.

Taxation TAXATATION

The Ministry of Finance and the State Taxation Administration have jointly issued the “Notice on Relevant Issues Concerning the Recognition and Administration of Tax-Exempt Status for Non-Profit Organizations.”
Recently, the Ministry of Finance and the State Taxation Administration jointly issued the “Notice on Relevant Issues Concerning the Recognition and Administration of Tax-Exempt Status for Non-Profit Organizations” (hereinafter referred to as the “Notice”). The Notice primarily sets forth provisions regarding the criteria for recognizing non-profit organizations, the reviewing authorities, the procedures for obtaining tax-exempt status, and the circumstances under which such status may be revoked.
Among them, eligible nonprofit organizations must simultaneously meet the following conditions: (1) They must be public institutions, social organizations, foundations, social service agencies, religious venues, religious academies, or other nonprofit entities recognized by the Ministry of Finance and the State Taxation Administration, established or registered in accordance with relevant national laws and regulations; (2) They must engage in public‑interest or nonprofit activities; (3) All income received, except for reasonable expenses directly related to the organization’s purposes, must be used exclusively for public‑interest or nonprofit undertakings as specified in the registration approval or the organization’s articles of association; (4) Their assets and any income generated therefrom may not be distributed, except for reasonable salaries and wages; (5) Upon dissolution, the remaining assets of the organization shall be allocated to public‑interest or nonprofit purposes, or disposed of by the registration authority through transfer to another organization with a similar nature and mission, with such disposition publicly announced; (6) The contributors shall retain no property rights or interests in the assets contributed to the organization; for the purposes of this provision, “contributors” refer to legal persons, natural persons, and other organizations, excluding governments at all levels and their departments; (7) Expenditures on staff salaries and benefits shall be kept within prescribed limits and shall not constitute disguised distribution of the organization’s assets. Specifically, the average salary level of staff shall not exceed twice the average salary level of comparable organizations in the same sector within the prefecture‑level or higher administrative area where the organization is tax‑registered, and staff benefits shall be provided in accordance with relevant state regulations; (8) Taxable income and its associated costs, expenses, and losses shall be accounted for separately from tax‑exempt income and its related costs, expenses, and losses.

The State Taxation Administration has issued the “Opinions on Launching the 2018 Spring Breeze Campaign to Facilitate Tax Services.”
Recently, the State Taxation Administration issued the “Opinions on Launching the 2018 Spring Breeze Campaign to Facilitate Tax Services,” which indicates that it will vigorously advance various tax system reforms. By the end of December 2018, efforts will be made to implement the Tobacco Leaf Tax Law, the Environmental Protection Tax Law, and their implementing regulations, while also expanding the scope of the water resources tax pilot program. In line with the work schedules of the National People’s Congress and the State Council, the revision process of the Tax Collection and Administration Law and its implementing regulations will be accelerated. By the end of October 2018, the invoice management system will be further improved. The opinions also stipulate that, by the end of October 2018, the filing procedures for VAT, income tax, and property‑related tax incentives will be streamlined: for corporate taxpayers, documentation previously required to be submitted to the tax authorities will largely be retained by the taxpayers for record‑keeping purposes, and the declaration forms for VAT, corporate income tax, consumption tax, and other taxes will be simplified and optimized. Furthermore, the pilot program to optimize the tax‑related business environment in Beijing and four other provinces and municipalities will continue to deepen, with the aim of achieving significant results by the end of June and expanding the pilot to an additional ten provinces and municipalities by the end of September.

Litigation & Arbitration

The General Office of the CPC Central Committee and the General Office of the State Council have issued the “Opinions on Several Issues Concerning Strengthening Reform and Innovation in the Field of Intellectual Property Adjudication.”
Recently, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Opinions on Several Issues Concerning Strengthening Reform and Innovation in the Field of Intellectual Property Adjudication” (hereinafter referred to as the “Opinions”). The Opinions set out, in broad terms, the fundamental principles and objectives of the reform, and outline specific measures to improve the intellectual property litigation system, strengthen the development of the intellectual property court system, and enhance the capacity of the intellectual property adjudication workforce.
With regard to improving the intellectual property litigation system, three key measures are proposed: establishing evidentiary rules tailored to the specific characteristics of IP cases; instituting a damages regime that reflects the value of intellectual property; and advancing reforms to adjudicatory practices that align with the inherent principles of IP litigation.
With regard to strengthening the construction of the intellectual property court system, the main measures proposed include establishing and improving a specialized intellectual property adjudication system, exploring mechanisms for cross‑regional adjudication of IP cases in locations other than the place of origin, and refining the systems for staffing, funding, and logistical support for IP courts.

The Ministry of Environmental Protection has issued the “Opinions on Legal Application Issues Concerning the Illegal Act of Commencing Construction Prior to Approval” for construction projects.
Recently, the Ministry of Environmental Protection issued the “Opinions on Legal Application Issues Concerning the Illegal Act of Commencing Construction Prior to Approval” (hereinafter referred to as the “Opinions”), which sets forth provisions regarding the legal application to unauthorized construction and the statute of limitations for administrative penalties.
Among them, the statute of limitations for administrative penalties imposed for the illegal act of “commencing construction without prior approval” is stipulated as follows:
1. Relevant Legal Provisions: Article 29 of the Administrative Penalty Law stipulates: “If an unlawful act remains undiscovered for two years, no administrative penalty shall be imposed, unless otherwise provided by law. The period specified in the preceding paragraph shall be calculated from the date the unlawful act occurred; if the unlawful act is continuous or ongoing, the period shall be calculated from the date the act ceases.”
2. Commencement of the limitation period. In accordance with the aforementioned legal provisions, the administrative penalty limitation period for the unlawful act of “commencing construction without prior approval” shall be calculated from the date the construction activity is completed. Accordingly, if the unlawful act of “commencing construction without prior approval” remains undiscovered within two years from the date the construction activity was completed, the environmental protection authority shall, in compliance with Article 29 of the Administrative Penalty Law, refrain from imposing an administrative penalty.
3. Administrative penalties for violations of the “three simultaneous” acceptance system for environmental protection facilities. 1. If a construction entity simultaneously commits both the violation of “commencing construction without prior approval” and the violation of the “three simultaneous” acceptance system for environmental protection facilities, separate administrative penalties shall be imposed in accordance with the law; 2. Penalties for violations of the “three simultaneous” acceptance system for environmental protection facilities are not subject to the statute of limitations applicable to administrative penalties for “commencing construction without prior approval.”

Other

A press conference was held to announce the convening of the First Session of the 13th National People’s Congress.
The First Session of the 13th National People’s Congress held a press conference at 11:00 a.m. on March 4 in the Press Hall of the Great Hall of the People, during which Spokesperson Zhang Yesui fielded questions from Chinese and foreign journalists on the session’s agenda and matters related to the work of the NPC. His responses primarily addressed constitutional amendments, China’s development model, the reform of the national supervision system, taxation, and other issues.
On the issue of constitutional amendment, Zhang Yesui stated that a key task of this session is to revise certain provisions of the Constitution and to deliberate on and adopt the constitutional amendment. In January 2018, the CPC Central Committee submitted to the Standing Committee of the National People’s Congress a proposal to amend certain parts of the Constitution. Based on deliberations, the Standing Committee drafted a constitutional amendment and submitted it for consideration at this session.
Zhang Yesui stated that deepening the reform of the national supervision system is a major political institutional reform of overarching significance, representing the top-level design of the state’s oversight framework. Its purpose is to strengthen the Party’s unified leadership over anti-corruption efforts and achieve full coverage of oversight over all public officials exercising public power. The National Supervisory Commission is an anti-corruption institution with Chinese characteristics. It operates jointly with the Central Commission for Discipline Inspection, performing both disciplinary inspection and supervisory functions. The Supervision Law constitutes the nation’s legislative foundation for combating corruption.

The first energy blockchain application has been implemented, promoting the interconnection and sharing of clean energy.
On February 28, a signing ceremony for an energy‑blockchain project—jointly launched by the China Merchants Charity Foundation, TÜV NORD, the New Energy Exchange, Panda Green Energy Group, and Huawei—was held in Shekou, Shenzhen. The project is also the world’s first community‑based public‑interest initiative to leverage blockchain technology. In its initial rollout, the program will select a pilot group of volunteers from the Shekou area to participate in virtual trading of clean electricity. When users choose clean energy on the platform, blockchain technology will generate smart contracts that facilitate direct, peer‑to‑peer virtual transactions between power plants and consumers.

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