JC Master Legal News Issue 1206

Key Takeaways for This Issue

The China Trustee Association issued an initiative to optimize trust services on May 6, unveiling the “China Trustee Association’s Initiative on Optimizing Trust Services and Promoting the Healthy, Sustainable Development of the Trust Industry.”

Three departments have issued the Work Plan for the 2026 “Civil Code Publicity Month.” On May 6, the Publicity Department of the CPC Central Committee, the Ministry of Justice, and the National Office for Popularizing the Law jointly released the Notice on Issuing the Work Plan for the 2026 “Civil Code Publicity Month.”

The Supreme People’s Court has issued the Interpretation (II) on Several Issues Concerning the Application of Law in Cases Involving Compensation for Damages Resulting from Road Traffic Accidents. Recently, the Supreme People’s Court promulgated the “Interpretation (II) on Several Issues Concerning the Application of Law in the Trial of Cases Involving Compensation for Damages Resulting from Road Traffic Accidents” (hereinafter referred to as the “Interpretation”), which will take effect on June 30, 2026.

Finance & Capital Markets

The China Trustee Association issued an initiative to optimize trust services on May 6, unveiling the “China Trustee Association’s Initiative on Optimizing Trust Services and Promoting the Healthy, Sustainable Development of the Trust Industry.”
The “Initiative” sets forth ten measures, including: upholding a trust‑based culture; strengthening compliance awareness; improving corporate governance and internal controls; and reinforcing comprehensive risk management. It also calls for adhering to the principle of “value for money” and resisting bid‑winning practices that undercut cost; standardizing marketing and promotional activities; implementing investor suitability management; tightening oversight of third‑party sales access; and safeguarding consumer rights. Furthermore, it advocates promoting differentiated development and refining performance‑assessment mechanisms; focusing on areas such as pension‑related trusts, green trusts, intellectual‑property service trusts, and prepayment‑fund service trusts; and bolstering integrity records for industry professionals, enforcing professional ethics, fostering industry collaboration and self‑regulation, and promptly reporting and addressing, in accordance with established rules, any instances of cut‑throat price competition.

The China Securities Regulatory Commission (CSRC) has issued a decision to amend and repeal certain securities and futures regulatory documents. Recently, the CSRC released the “Decision on Amending and Repealing Certain Securities and Futures Regulatory Documents,” which takes effect from the date of its publication. Under this decision, one regulatory document is amended to align with current requirements, while two others are repealed. Specifically, the “Guiding Opinions on Improving Post-Delisting Supervision of Listed Companies” revises the term “shareholders’ general meeting” to “shareholders’ meeting,” and adds that, where a delisted company, in accordance with the Company Law and its articles of association, establishes an audit committee under the board of directors to exercise the functions of the supervisory board, it may choose not to establish a separate supervisory board or appoint supervisors. The repealed documents include the “Guidance on the Approval and Supervision of Domestic Enterprises Applying to List on the Hong Kong GEM” and the “Guiding Opinions on Further Strengthening Information Technology Management in Futures Companies.”

Commercial & Corporate

Three departments have issued a notice to expand loan support for technological innovation and technological upgrading to facilitate equipment modernization. Recently, the People’s Bank of China, the National Development and Reform Commission, and the Ministry of Finance released the “Notice on Expanding the Allocation of Loans for Technological Innovation and Technological Upgrading to Further Support Equipment Modernization.”
The Notice focuses on optimizing policy measures across the entire financing chain for technological innovation and equipment upgrades, expanding the scope of re-lending support to include privately owned small and medium-sized enterprises with high R&D investment levels, and extending loan support for technological transformation and equipment renewal to 14 sectors, including electronic information, artificial intelligence, facility agriculture, and consumer‑oriented commercial facilities. At the same time, it calls for enhancing the quality and efficiency of lending services, strengthening financial support for enterprises’ purchases of AI‑related equipment and software services, and streamlining the disbursement and management of re‑loans to improve the effectiveness of policy implementation.

The Ministry of Ecology and Environment plans to strengthen environmental management of hazardous waste in the aluminum smelting industry. Recently, the Ministry has drafted the “Technical Specification for the Pollution Control of Hazardous Waste in the Aluminum Smelting Industry (Draft for Public Comment)” (hereinafter referred to as the “Draft”), which is now open for public consultation. The deadline for submitting comments is June 5.
The Draft for Public Comments sets forth pollution control and management requirements for aluminum slag, aluminum dross, salt slag, carbon residue, overhaul slag, and dust‑removal ash generated in the aluminum smelting and related industries throughout their collection, storage, transportation, utilization, and disposal processes. In the section on general requirements, the Draft specifies that primary aluminum producers shall adopt advanced, state‑of‑the‑art process technologies to enhance the quality of carbon products, extend the service life of electrolytic cells, and reduce the generation of carbon residue and overhaul slag; enterprises with smelting facilities and those engaged in the utilization of aluminum slag are required to optimize process design and operational procedures to minimize the production of aluminum slag, aluminum dross, and salt slag. According to the Draft, in addition to complying with relevant environmental protection requirements, operators must also adhere to applicable laws, regulations, and standards pertaining to workplace safety, occupational health, transportation, fire safety, and other areas.

The Ministry of Industry and Information Technology has recently issued the “Implementation Plan for Leading a Quality Revolution in Light Industrial Products through Standards” (Draft for Public Comment), soliciting opinions from the public. Feedback is being accepted until May 12.
According to the draft for public comment, by 2027, the standardization mechanism in the light industry will be further improved, with approximately 200 product and method standards developed or revised, and around 100 assessments and reviews of standard implementation conducted, thereby enhancing the alignment of standards with new products, new technologies, and new business models. By 2030, a globally leading standard system for the light industry will be essentially in place, with more effective standard provision, comprehensively supporting the “China Light Industry” brand in advancing more steadily and rapidly onto the world stage. To this end, the draft outlines six key initiatives, including an action plan to enhance quality through an improved standardization framework, an initiative to lay the groundwork with mandatory national standards, and a drive to promote digital transformation via standards. Notably, the draft calls for strengthening the quality of standard supply by encouraging standardization bodies to establish a “standard age” database and to conduct ongoing evaluations and revisions of the effectiveness of outdated standards and their associated supporting standards.

LITIGATION & ARBITRATION

Three departments have issued the Work Plan for the 2026 “Civil Code Publicity Month.” On May 6, the Publicity Department of the CPC Central Committee, the Ministry of Justice, and the National Office for Popularizing the Law jointly released the Notice on Issuing the Work Plan for the 2026 “Civil Code Publicity Month.”
The Plan specifies that the publicity month will run from May 1 to May 31, 2026, with key focus areas including Xi Jinping’s Thought on the Rule of Law, the Civil Code, the Environmental Protection Code, and relevant laws and regulations pertaining to optimizing the business environment, the private sector, the unified national market, scientific and technological innovation, financial risk prevention, and foreign trade and investment. Priority tasks include releasing typical cases related to the Civil Code, organizing essay contests on ecological and environmental rule of law, conducting public awareness campaigns on tax‑related rule of law, offering training programs to enhance the legal literacy of private entrepreneurs, and rolling out themed legal‑education initiatives—such as bringing the law into enterprises, rural areas, and communities—in multiple localities.

The Supreme People’s Court has issued the Interpretation (II) on Several Issues Concerning the Application of Law in Cases Involving Compensation for Damages Resulting from Road Traffic Accidents. Recently, the Supreme People’s Court promulgated the “Interpretation (II) on Several Issues Concerning the Application of Law in the Trial of Cases Involving Compensation for Damages Resulting from Road Traffic Accidents” (hereinafter referred to as the “Interpretation”), which will take effect on June 30, 2026.
The Interpretation comprises 12 articles, setting forth provisions on liability subjects, liability determination, compensation calculation, procedural rules, and other aspects. Its main contents include: first, clarifying the allocation of liability in cases involving motor vehicle rental or borrowing; second, explicitly providing protection for victims in “door‑opening” accidents; third, establishing criteria for assessing fault in situations of “kindly offering a ride”; fourth, resolving difficulties concerning the scope of compensation and methods of calculation; and fifth, streamlining litigation procedures through consolidated adjudication. Notably, the Interpretation stipulates that if an injured party asserts that the passenger’s liability falls within the scope of the motor vehicle’s own liability and seeks compensation from the insurer—both within the compulsory traffic insurance limit and in accordance with the terms of the commercial third‑party liability insurance policy—the people’s courts shall uphold such claims.

Hangzhou Courts Release Typical Cases on Protecting the Rights and Interests of AI Enterprises and Professionals. Recently, the Hangzhou courts published a series of typical cases concerning the protection of the rights and interests of artificial intelligence enterprises and their employees.
A total of seven cases were released this time, addressing disputes related to non‑compete restrictions, falsification of academic credentials, overtime pay, reasonable business travel, job reassignment and salary reduction due to technological changes, determination of competitive relationships, and the allocation of operating costs. The rulings clarify the following: bearing criminal liability for infringement of trade secrets does not automatically exempt one from contractual liability for breaching a non‑compete obligation; if falsification of academic credentials is sufficient to affect the hiring decision, the labor contract may be deemed invalid; where an employer actually arranges extended working hours, it may not refuse to pay overtime on the ground that prior approval was lacking; employees must comply with reasonable business travel arrangements within the scope agreed upon in their contracts; if an employer reassigns positions and reduces salaries on the grounds of AI‑related technological disruption, or if the negotiated terms are manifestly unreasonable, the termination of the labor contract may constitute unlawful dismissal; the existence of a competitive relationship should be assessed through a substantive review based on the actual R&D field; and normal operating procurement costs may not be passed on to employees.

The Supreme People’s Court released six typical cases involving compensation for damages in road traffic accidents. On May 6, the Supreme People’s Court published these landmark cases.
The six cases center on the application of rules governing compensation for damages arising from road traffic accidents: where a motor vehicle owner, knowing that the driver has consumed alcohol, nevertheless hands over the vehicle, the owner shall bear joint liability with the user to the extent of their respective fault; in “door‑opening collisions,” any harm caused to passengers is attributable to the motor vehicle side, and the insurer shall compensate within the limits of its liability; under the doctrine of “good‑faith carpooling,” if the driver acts without intent or gross negligence, the compensatory liability may be reduced; when a motor vehicle engaged in specialized construction operations causes damage while traveling off public roads, compulsory traffic insurance shall apply by analogy; claims for recovery brought by the Road Rescue Fund may be heard concurrently with road traffic dispute proceedings; and in non‑motorized vehicle accidents, the driver, the commercial third‑party liability insurer, and other relevant parties may be joined as co‑defendants and tried together.

The Supreme People’s Court has released typical cases involving crimes of infringing upon citizens’ personal information and related offenses. Recently, the Supreme People’s Court announced a series of landmark cases in which people’s courts have, in accordance with the law, punished crimes of infringing upon citizens’ personal information and associated offenses.
This release features five case studies involving medical appointment‑booking data, railway travel information, student registration and academic credential records, online harassment through “unboxing” tactics, and fraud perpetrated by exploiting vaccine‑appointment information. The cases demonstrate that the people’s courts have prioritized cracking down on illegal acquisition of personal information during service provision; insider leaks and resale of such data; circumvention of authentication mechanisms to steal official platform data; the establishment of “social engineering databases” for unauthorized data queries and cyberbullying; and the intrusion of systems to obtain order‑related information for targeted fraud. In response, relevant entities and individuals have been sentenced to fixed-term imprisonment, fines, or cumulative penalties for multiple offenses, with some cases also ordering the deletion of unlawfully obtained data, payment of public‑interest damages, and public apologies.

On May 8, the State Council promulgated the revised Regulations for the Implementation of the Administrative Reconsideration Law of the People’s Republic of China.
The Regulations comprise 8 chapters and 77 articles, effective July 1, 2026. They stipulate that administrative reconsideration organs shall conduct a comprehensive review of the legality and appropriateness of administrative actions, and further specify circumstances under which administrative reconsideration may be sought, the identification of applicants and respondents, the time limit for filing applications when statutory duties are not fulfilled, as well as pre‑reconsideration requirements such as the non‑disclosure of government information. The Regulations also refine mechanisms for self‑correction, the Administrative Reconsideration Committee, hierarchical review, consolidated proceedings, investigation and evidence collection, ancillary review of normative documents, and the system of reconsideration decisions, while mandating that local governments establish a responsibility system for administrative reconsideration work.