JC Master Legal News Issue 1180

Key Takeaways for This Issue

The State Administration for Market Regulation plans to revise the Measures for the Supervision and Administration of Inspection and Testing Institutions.

On September 29, the State Administration for Market Regulation issued an announcement soliciting public comments on the “Administrative Measures for the Supervision and Management of Inspection and Testing Institutions (Draft for Comments),” with a deadline for submitting feedback set for October 28, 2025.

The State Administration for Market Regulation has issued the industry standard “Standards for Filing of Concentrations of Undertakings.”

Recently, the State Administration for Market Regulation issued the “Regulations on Filing of Concentrations of Undertakings” (hereinafter referred to as the “Filing Regulations”), which will take effect on October 1, 2025.

The Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security have jointly issued a document to improve the mechanism for verifying the identities of criminal suspects and defendants. Recently, they jointly promulgated the “Opinions on Improving the Mechanism for Verifying the Identities of Criminal Suspects and Defendants in Criminal Cases.”

Commercial & Corporate 
The State Administration for Market Regulation plans to revise the Measures for the Supervision and Administration of Inspection and Testing Institutions.

On September 29, the State Administration for Market Regulation issued an announcement soliciting public comments on the “Administrative Measures for the Supervision and Management of Inspection and Testing Institutions (Draft for Comments),” with a deadline for submitting feedback set for October 28, 2025. 
The Draft for Public Comment comprises 34 articles, with 5 new provisions. It focuses on refining the supervision and management framework, strengthening the unique reporting code and verification platform, and implementing credit-based, tiered, and categorized regulatory approaches. The draft also reinforces the principal responsibilities of institutions and personnel, standardizes agency contracts, report corrections, retention of original records, and self‑inspection and self‑reporting. It clarifies subcontracting management and requirements for report signing and sealing, and prohibits the falsification of signatures. Penalties for false reporting have been tightened: violations will be added to the list of serious illegal and untrustworthy acts, and both institutions and responsible individuals are subject to specific penalty provisions.

The State Administration for Market Regulation has issued the industry standard “Standards for Filing of Concentrations of Undertakings.”

Recently, the State Administration for Market Regulation issued the “Regulations on Filing of Concentrations of Undertakings” (hereinafter referred to as the “Filing Regulations”), which will take effect on October 1, 2025. 
The “Regulations on Filing” comprise six chapters and six appendices, setting forth the requirements for filing in cases of concentration of undertakings, including the conditions for filing, the required documentation, and the procedural steps. Specifically: first, it clarifies under what circumstances enterprises are required to file a concentration notification, covering situations that constitute a concentration, cases meeting the filing thresholds prescribed by the State Council, instances where the thresholds are not met but filing is still mandated, and circumstances exempt from filing, thereby highlighting enterprises’ compliance obligations. Second, it specifies the particular documents and materials that must be submitted at the time of filing, along with the relevant requirements and explanatory notes—such as the key contents of the filing form and the requirements for simplified‑case filings—so as to assist filing entities in completing the forms and supporting materials in a standardized and accurate manner, thereby enhancing filing efficiency. Third, it outlines how enterprises should prepare and submit the requisite filing documents and materials, as well as the procedures for acceptance and review following submission, providing filing entities with clear and predictable guidance.

Taxation

Three departments have standardized administrative penalties related to the reporting of tax-related information by internet platform enterprises.

Recently, the State Taxation Administration issued the “Notice on Matters Concerning Administrative Penalties for the Submission of Tax-Related Information by Internet Platform Enterprises” (hereinafter referred to as the “Notice”), which shall take effect from the date of its promulgation. 
The Notice elaborates on penalties for non‑compliant internet platform enterprises across three key areas: applicable circumstances, the imposing authority, and the specific sanctioning measures. In particular, for internet platform enterprises subject to suspension and rectification, tax authorities will implement a series of measures: first, they will restrict the issuance of invoices by halting the allocation of new invoices and reducing existing invoice limits, while also issuing risk‑alert notifications when other entities seek to issue invoices to such enterprises; second, they will publicize the relevant violations and penalty decisions through official websites, news outlets, WeChat official accounts, and other channels; and third, in accordance with established procedures, they will recommend that the competent regulatory authorities impose appropriate enforcement actions against the offending internet platform enterprises as prescribed by law. Furthermore, for those enterprises that actively undertake corrective measures during the suspension and rectification period and duly submit all required tax‑related information in compliance with laws and regulations, the relevant penalties will be promptly lifted upon confirmation by the tax authorities.

Litigation & Arbitration

The Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security have jointly issued a document to improve the mechanism for verifying the identities of criminal suspects and defendants.

Recently, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security jointly issued the “Opinions on Improving the Mechanism for Verifying the Identity of Criminal Suspects and Defendants.” 
The “Opinions” comprise fifteen articles, stipulating that public security organs, procuratorates, and courts shall, in accordance with the law, promptly collect, secure, and examine identity‑related evidence, and that identity determination must be based on solid and sufficient evidence. During the investigation phase, verification through information systems, archives, and biometric matching is required; no identity may be confirmed without such verification. Identity must be established by means of household registration or an identity card verified by the public security authorities, and supplementary materials shall be provided when doubts arise. If identity cannot be ascertained, the case may be processed under the self‑reported name. At the stages of review for prosecution and trial, complete identity information and supporting evidence are required; cases involving unidentified persons may not be subject to summary or expedited procedures. Special provisions are set forth for verifying the identities of residents of Hong Kong, Macao, and Taiwan, as well as foreign nationals. A collaborative mechanism for verifying identity information is established, with errors to be corrected promptly upon discovery, and legally effective judgments permitting lawful correction of identity details.

For the first time, the Pudong Court invoked the regulations of the New Area, finding that a senior executive had breached their special duty of care in the run-up to bankruptcy and awarding RMB 1 million in damages.

Recently, the People’s Court of Pudong New Area in Shanghai, for the first time, applied the “Several Provisions of the Pudong New Area of Shanghai on Improving the Market‑Based and Rule‑of‑Law Corporate Bankruptcy System” to render a first‑instance judgment, finding that Mr. Chang, the general manager of Company A, had breached his special duty of care during the period when the company was on the brink of bankruptcy, and ordering him to pay compensation of RMB 1 million. Following the defendant’s appeal, the Third Intermediate People’s Court of Shanghai upheld the original ruling in its final judgment. 
The court found that, as the company approached bankruptcy, Chang failed to take reasonable measures to prevent further deterioration of the enterprise’s financial condition; instead, he released the equity pledge and transferred his shares, thereby causing Company A to lose control over Company B, dismantling the VIE structure, and harming the interests of the company and its creditors. Pursuant to Article 4 of the Pudong Regulations on Enterprise Bankruptcy, corporate executives who, through intentional misconduct or gross negligence, cause losses to the company’s assets shall bear liability for compensation. This case clarifies the judicial standards for reviewing breaches of special fiduciary duties by executives and sets forth specific requirements for ensuring the compliance of executive conduct during corporate bankruptcy proceedings.

The China (Beijing) Securities and Futures Arbitration Center has officially commenced operations and released the “Rules on Securities and Futures Arbitration.”

Recently, the China (Beijing) Securities and Futures Arbitration Center, established by the Beijing Arbitration Commission/Beijing International Arbitration Center, was officially inaugurated at the Beijing CBD International Commercial Arbitration Center, where it also unveiled the “Rules on Securities and Futures Arbitration” and ten landmark arbitration cases. 
The “Arbitration Rules for Securities and Futures” emphasize three core principles—professionalism, efficiency, and intelligence—and feature six key highlights: expanding the scope of arbitrable matters, advancing digital and intelligent arbitration, refining the mediation mechanism, optimizing the resolution of collective disputes, exploring advance compensation schemes, and enriching the supporting regulatory framework. The Beijing Arbitration Commission has signed cooperation agreements with six institutions, including the Beijing Stock Exchange, to facilitate the implementation of the securities and futures arbitration mechanism. The ten landmark arbitration cases released cover areas such as margin trading and securities lending, bonds, private equity funds, and cross-border derivatives, providing market participants with clear guidance on conduct and robust institutional safeguards.

The State Council has amended the Regulations of the People’s Republic of China on International Maritime Transport.

Recently, the State Council issued the “Decision on Amending the Regulations of the People’s Republic of China on International Maritime Transport” (hereinafter referred to as the “Decision”), which shall take effect from the date of its promulgation. The Decision primarily stipulates the following: First, services provided by international shipping trading platforms are brought within the scope of application of the Regulations. Second, it is clarified that if a country or region that has concluded with China or jointly participated in international maritime transport treaties or agreements violates the provisions thereof, thereby causing China to lose or suffer damage to the benefits it is entitled to under such treaties or agreements, or impeding the achievement of the objectives of those treaties or agreements, the Chinese government shall have the right to require the relevant country or regional government to cease such conduct and adopt appropriate remedial measures, and may, in accordance with the relevant treaties or agreements, suspend or terminate the performance of corresponding obligations. Furthermore, if any country or region imposes, or assists or supports the imposition of, discriminatory prohibitions, restrictions, or other similar measures against operators, vessels, or crew members engaged in China’s international maritime transport and related ancillary activities, then, unless the relevant treaties or agreements provide sufficient and effective remedies, the Chinese government shall, based on the actual circumstances, take necessary countermeasures.