JC Master Legal News Issue 1178

Key Takeaways for This Issue

State Administration of Foreign Exchange: Allows reinvestment of foreign exchange profits earned from foreign direct investment within China.

On September 15, the State Administration of Foreign Exchange issued the “Notice on Matters Concerning the Deepening of Reform in Foreign Exchange Management for Cross-Border Investment and Financing.”

The Supreme People’s Court, in conjunction with the Ministry of Justice, has released typical cases involving administrative reconsideration and administrative litigation concerning enterprises.

On September 17, the Supreme People’s Court and the Ministry of Justice jointly released ten typical cases involving administrative reconsideration and administrative litigation concerning enterprises, covering areas such as qualification licensing, land transfer, administrative penalties, administrative agreements, and administrative compensation. These cases are intended to guide courts at all levels and administrative reconsideration bodies in standardizing law enforcement and judicial practices related to businesses, thereby ensuring the lawful and equal protection of the rights and interests of private enterprises. 
The website of the National People’s Congress of China published a list of currently effective laws on September 17, comprising 310 items.

Finance & Capital Markets 
State Administration of Foreign Exchange: Permits the domestic reinvestment of foreign‑exchange profits under foreign direct investment. On September 15, the State Administration of Foreign Exchange issued the “Notice on Matters Concerning the Deepening of Reform in Foreign‑Exchange Management for Cross‑Border Investment and Financing.” 
It was proposed to allow the reinvestment of foreign‑exchange profits earned under direct foreign investment within China. Foreign‑invested enterprises may reinvest domestically the foreign‑exchange‑denominated profits legally generated in China, and overseas investors may likewise reinvest foreign‑exchange profits lawfully obtained abroad. Such foreign‑exchange funds may be remitted into the capital account of the invested enterprise or into the capital‑account settlement account of the equity transferor, with fund usage governed by the relevant account‑management requirements. With regard to enhancing cross‑border financing convenience: nationwide, eligible high‑tech enterprises, “specialized, refined, distinctive, and innovative” firms, and technology‑oriented small and medium‑sized enterprises may borrow foreign debt up to an equivalent of US$10 million. In addition, enterprises selected through the “innovation‑points system” administered by the relevant authorities may borrow foreign debt up to an equivalent of US$20 million.

Commercial & Corporate 
Two departments have issued the Measures for the Administration of Business Entity Registration Applications and Agency Activities.

On September 15, the State Administration for Market Regulation and the People’s Bank of China jointly issued the “Notice on the Issuance of the Measures for the Administration of Business Entity Registration Applications and Agency Activities.” 
The Measures clearly set forth provisions on the identity management of registration liaisons and agents, real-name verification, integrity declarations, and standards of conduct for agency activities. Registered agents are required to file their identity and business information through the information system, with provincial-level authorities compiling and consolidating agent data. Agents shall not submit false documents or assist in fraudulent registrations; they must fulfill anti‑money‑laundering obligations, establish internal control systems, conduct customer due diligence, and retain relevant records for a period of ten years. Any violations will be subject to enhanced penalties in accordance with the law, and the persons directly responsible shall be prohibited from submitting registration applications for three years.

The China Association of Automobile Manufacturers has issued an initiative on standardized payment practices for supplier invoices among complete vehicle manufacturers.

On September 15, the China Association of Automobile Manufacturers issued the “Initiative on Standards for Payment of Accounts Payable by Complete Vehicle Manufacturers to Suppliers,” setting forth normative guidelines for relevant provisions in procurement contracts between vehicle manufacturers and their suppliers, focusing on key stages such as order confirmation, delivery and acceptance, payment and settlement, and contract duration. 
The initiative clearly specifies standardized procedures for order confirmation, delivery and acceptance, payment settlement, and contract duration in procurement contracts between vehicle manufacturers and suppliers. In principle, Party A shall complete goods acceptance within three working days, and the payment term shall commence on the date of successful acceptance, with a maximum of 60 days, extended by any applicable holidays. Payment by cash or bank acceptance drafts is encouraged; when the supplier is an SME, full payment by cash or bank acceptance drafts is recommended. The contract term shall be no less than one year.

The Ministry of Finance has recently issued the Application Guide for the “Enterprise Sustainability Disclosure Standards—Basic Standards (Trial).” The guide clarifies that enterprises should appropriately define the scope of their value chain when disclosing sustainability information and, in the event of significant changes, reassess associated risks and opportunities. It emphasizes the importance of linking sustainability disclosures with financial statements and other disclosed information, noting that investors and creditors are the primary users of such information. Disclosure must adhere to the principles of materiality and proportionality; enterprises are required to disclose both current and anticipated financial impacts of sustainability‑related risks and opportunities, and to explain how their strategies and business models enhance risk resilience. In addition to the core elements, companies must also provide supplementary disclosures on key sustainability‑related impacts to meet the diverse information needs of stakeholders.

Taxation: Two departments jointly issued the “Administrative Measures for Anti-Money Laundering in Accounting Firms.”

Recently, the Accounting Department of the Ministry of Finance and the People’s Bank of China jointly issued the “Notice on the Issuance of the Measures for the Administration of Anti-Money Laundering Work by Accounting Firms.” 
The Measures stipulate that accounting firms must establish internal controls for anti‑money laundering, conduct money‑laundering risk assessments, perform customer due diligence, file suspicious transaction reports, maintain records of customer identities and business activities for at least ten years, ensure information confidentiality, provide relevant training, and carry out internal audits. They also require enhanced scrutiny of high‑risk clients and mandate the timely reporting of any suspicious transactions. Provincial‑level or higher financial authorities and certified public accountant associations are responsible for oversight and self‑regulation; violations will be subject to legal penalties. 
Four departments have launched the 2025 annual filing process for the value-added tax additional deduction list for integrated circuit enterprises.

On September 16, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, and the State Taxation Administration jointly issued the “Notice on Conducting the Preparation of the List of Integrated Circuit Enterprises Eligible for the Value-Added Tax Additional Deduction Policy in 2025.” The application period is from September 25 to September 30 and from October 9 to October 14, 2025. Eligible enterprises include those engaged in integrated circuit design, manufacturing, packaging and testing, equipment, and materials; they must submit their applications through the designated information system and provide paper-based supporting documents. Following preliminary review by local departments of industry and information technology and development and reform, the lists will be submitted by October 31. The four ministries, including the Ministry of Industry and Information Technology, will conduct a secondary review and finalize the list. Enterprises may check the results after November 30, and those selected will be entitled to the policy benefits starting January 1, 2025. Any significant changes to an enterprise must be reported promptly; applications submitted after the deadline will not be accepted.

LITIGATION & ARBITRATION

The Supreme People’s Court, in conjunction with the Ministry of Justice, has released typical cases involving administrative reconsideration and administrative litigation concerning enterprises.

On September 17, the Supreme People’s Court and the Ministry of Justice jointly released ten typical cases involving administrative reconsideration and administrative litigation concerning enterprises, covering areas such as qualification licensing, land transfer, administrative penalties, administrative agreements, and administrative compensation. These cases are intended to guide courts at all levels and administrative reconsideration bodies in standardizing law enforcement and judicial practices related to businesses, thereby ensuring the lawful and equal protection of the rights and interests of private enterprises. 
Through this batch of typical cases, the Supreme People’s Court and the Ministry of Justice have clarified the following key principles: the revocation of a construction qualification license must safeguard the enterprise’s right to be informed and its right to present a defense; liquidated damages for breach of land‑transfer contracts shall be calculated separately for each parcel of land; administrative penalties must be proportionate to the facts and circumstances of the violation; administrative filing may not unlawfully impose additional conditions; the determination of collusive bidding requires a comprehensive assessment of the specific conduct involved; if an administrative agency fails to fulfill an administrative promise, it must compensate the enterprise for its losses; the performance of administrative agreements may not unlawfully impose additional conditions; normative documents may not contravene higher‑level laws by imposing additional licensing requirements; reliance on meeting minutes may give rise to a claim for the fulfillment of statutory duties; and where adjustments to a water‑source protection zone render the continuation of a mining right impossible, reasonable compensation must be provided.

The Supreme People’s Procuratorate, in conjunction with two other departments, has released typical cases of public-interest litigation concerning accessibility and age-friendly design.

On September 17, the Supreme People’s Procuratorate, the Ministry of Civil Affairs, and the China Disabled Persons’ Federation jointly released a batch of typical cases of public-interest litigation concerning accessibility and age-friendly environments. 
The six typical cases selected for this compilation cover areas such as accessible infrastructure, information communication, and social services, focusing on the accessibility and age‑friendly needs of specific groups—including persons with disabilities and older adults—in contexts like transportation, public services, and emergency response. Key topics include the rectification, upgrading, and institutional improvement of accessible facilities and services—ranging from urban parks and port terminals to construction drawings for public buildings, medical appointment registration, emergency call systems, and public‑service apps—while clarifying the principal responsibilities of administrative agencies and relevant entities, promoting collaborative governance, and enhancing the inclusiveness of digital services.

The website of the National People’s Congress of China has published a list of currently effective laws.

On September 17, the website of the National People’s Congress of China published a list of currently effective laws, totaling 310. 
According to the catalog, as of the closing of the 17th Meeting of the Standing Committee of the 14th National People’s Congress on September 12, 2025, China has a total of 310 currently effective laws. Among these, in the category of constitutional-related laws, the Law of the People’s Republic of China on Legal Education and Publicity was adopted; in administrative law, the Food Safety Law of the People’s Republic of China was amended, and the Law of the People’s Republic of China on Responding to Public Health Emergencies was adopted; in economic law, the Atomic Energy Law of the People’s Republic of China and the National Parks Law of the People’s Republic of China were adopted; and in procedural and non‑procedural laws, the Arbitration Law of the People’s Republic of China was revised.