JC Master Legal News Issue 865

Key Takeaways for This Issue

Ministry of Finance: Simplifying the Asset Valuation Procedures for the Commercialization of Scientific and Technological Achievements by Public Institutions

Recently, the Ministry of Finance issued the “Decision of the Ministry of Finance on Amending the Interim Measures for the Administration of State-owned Assets in Public Institutions,” thereby revising the Interim Measures for the Administration of State-owned Assets in Public Institutions.

The Xi’an Municipal Supervision Bureau has initiated an investigation into Lizhixing and ordered it to promptly arrange for vehicle returns and refunds.

Regarding the widely noted “consumer dispute over a lady’s purchase of a Mercedes-Benz vehicle,” the market supervision authorities of the High-tech Zone recently disclosed updates on the progress of their investigation.

Tax cuts for small and micro enterprises are being fully implemented, and the VAT reform is taking root.

As most small-scale taxpayers file on a quarterly basis, and corporate income tax is paid in quarterly installments, the April filing period marks the first quarterly return period following the implementation of the universal tax and fee reduction policies for micro and small enterprises, making it a critical window for the full realization of these benefits and for the concentrated manifestation of their fiscal impact.

Major Announcement: The Supreme People’s Procuratorate Has Issued New Regulations to Strengthen and Standardize Case Guidance.

In order to strengthen and standardize the case‑guidance work of the procuratorial organs, leverage the exemplary and leading role of guiding cases in prosecutorial case handling, promote strict and impartial administration of justice by the procuratorial organs, and ensure the uniform and correct application of the law, the Supreme People’s Procuratorate recently issued the revised “Regulations of the Supreme People’s Procuratorate on Case‑Guidance Work” (hereinafter referred to as the “Regulations”).

The CPC Central Committee has completed the second round of centralized review and cleanup of Party regulations and normative documents.

The Decision of the CPC Central Committee on Abolishing, Declaring Invalid, and Amending Certain Party Regulations and Normative Documents was recently issued. The issuance of this Decision marks the successful completion of the second round of centralized review and cleanup of central Party regulations and normative documents, which was launched in November 2018.

Table of Contents

Table of Contents

Finance & Capital Markets

Ministry of Finance: Simplifying the Asset Valuation Procedures for the Commercialization of Scientific and Technological Achievements by Public Institutions

Securities offices are making early preparations, patiently awaiting the release of detailed rules on spin-off listings.

The China Securities Regulatory Commission has imposed administrative penalties, in accordance with the law, on two cases of violations of information disclosure regulations.

China’s first provincial-level REITs deal in the talent‑rental housing sector has been successfully listed on the Shenzhen Stock Exchange.

Corporate & Commercial

The Xi’an Municipal Supervision Bureau has initiated an investigation into Lizhixing and ordered it to promptly arrange for vehicle returns and refunds.

Real estate mortgage registration can be processed in a one-stop service.

Public Consultation on the Provisional Regulations on the Administration of Carbon Emission Trading (Draft for Comments)

This year’s new policies for wind and solar power have been unveiled, introducing a subsidy‑bidding system.

Taxation

Tax cuts for small and micro enterprises are being fully implemented, and the VAT reform is taking root.

Litigation & Arbitration

Major Announcement: The Supreme People’s Procuratorate Has Issued New Regulations to Strengthen and Standardize Case Guidance.

Opinions on Several Issues Concerning the Handling of Criminal Cases Involving “Loan Traps”

Arrests in organized crime and gang-related cases are being carried out in tandem with asset recovery, safeguarding legitimate rights and interests.

Other

The CPC Central Committee has completed the second round of centralized review and cleanup of Party regulations and normative documents.

Finance & Capital Markets

Ministry of Finance: Simplifying the Asset Valuation Procedures for the Commercialization of Scientific and Technological Achievements by Public Institutions

Recently, the Ministry of Finance issued the “Decision of the Ministry of Finance on Amending the Provisional Measures for the Administration of State‑Owned Assets in Public Institutions,” thereby revising the aforementioned measures. A responsible official from the Ministry stated that the Decision amends eight existing articles and adds two new ones, primarily granting state‑established research and development institutions and higher education institutions the authority to independently manage the scientific and technological achievements they hold, streamlining the asset appraisal procedures involved in the commercialization of such成果, and clarifying both the mechanisms for public pricing and the measures for addressing deliberate underpricing in the disposal of state‑owned assets.

The official pointed out that the Decision clearly stipulates the following policies for state‑established research and development institutions and higher education institutions: First, with respect to the scientific and technological achievements they hold, these entities may independently decide whether to transfer, license, or contribute such achievements as equity investments, without needing approval or filing with the competent supervisory or financial authorities, and may determine pricing through negotiated agreements, listing on technology‑trading markets, auctions, or other methods. Second, all income derived from the commercialization of scientific and technological achievements shall remain with the institution itself. Third, when transferring, licensing, or contributing as equity investments scientific and technological achievements held by these entities to wholly state‑owned enterprises, asset appraisal is not required; however, when such transfers, licenses, or equity contributions are made to non‑wholly state‑owned enterprises, the institution may independently decide whether to conduct an asset appraisal. The Decision further clarifies that, when state‑established research and development institutions and higher education institutions commercialize their held scientific and technological achievements and set prices through negotiated agreements, they must publicly disclose the names of the achievements and the proposed transaction prices within their own institutions. At the same time, it specifies that if public institutions or their staff engage in practices such as collusive fraud or backroom dealings to dispose of state assets at undervalued prices, they shall be subject to disciplinary action in accordance with the Regulations on Penalties and Disciplinary Measures for Financial Violations.

Securities offices are making early preparations, patiently awaiting the release of detailed rules on spin-off listings.

Recently, several listed companies have publicly announced their intention to spin off subsidiaries for listing on the STAR Market, drawing attention from both the market and regulators; some of these companies have even received regulatory letters. Earlier, Vice Chairman Li Chao of the China Securities Regulatory Commission stated publicly that detailed rules governing the spin-off of subsidiaries from main-board offices for STAR Market listings would certainly be issued. Although the specific guidelines have yet to be released, many enterprises that meet the criteria for spin-off listings are already expressing interest in pursuing a STAR Market offering.

Investment bankers note that the forthcoming detailed rules will place particular emphasis on assessing the reasonableness, feasibility, and compliance of spin-off listings, as well as scrutinizing related-party transactions for their rationality, necessity, and fairness. Key areas of focus for investment banks include the criteria for spin-off listings—covering profitability requirements, regulations on related-party transactions, and restrictions on intra-industry competition—alongside the responsibilities and obligations of intermediary institutions and disclosure requirements. At present, several securities offices have begun monitoring and building pipelines of relevant projects, with New Third Board companies that meet the STAR Market’s listing criteria emerging as priority targets for some offices.

Review key and challenging points.

At present, there are relatively few domestic cases of spinning off subsidiaries for an IPO, and the relevant operational rules and implementation details remain unclear. In interviews with reporters, several securities offices have outlined the potential challenges and key priorities in the guidance process.

“At present, intermediary institutions primarily refer to Document No. 67—namely, the ‘Notice on Regulating Issues Related to the Overseas Listing of Subsidiaries of Domestic Listed Companies’—as well as the basic criteria and guiding principles outlined by regulators at the April 2010 briefing on the review of ChiNext IPOs. They also take into account subsequent regulations issued in March 2019, such as the ‘Answers to Several Questions Concerning Initial Public Offering Business’ and the ‘Notice on the Release of Q&A on the Review of Stock Issuance and Listing on the STAR Market of the Shanghai Stock Exchange.’ On this basis, and in compliance with the STAR Market’s issuance and listing rules, they undertake proactive planning, preliminary engagement, and strategic positioning for the listed subsidiaries slated for spin‑off,” said Great Wall Guorui Securities.

Great Wall Guorui Securities believes that, for intermediary institutions, accurately identifying listed companies and selecting subsidiaries eligible for spin-off listings on the STAR Market remains a significant challenge. Moreover, during the process of guiding a subsidiary’s spin-off and listing, the lack of specific provisions and clear regulatory guidance makes it difficult to conduct targeted due diligence and verification, thereby undermining the efficiency and effectiveness of such advisory services.

A relevant official at Huafu Securities stated that, during the process of advising a subsidiary’s spin-off and listing, the key challenges often lie in verifying the reasonableness, feasibility, and compliance of the spin-off; determining issues related to related-party transactions and intra-industry competition; and assessing the independence of the spun‑off entity in terms of personnel, assets, finances, and organizational structure. Given that listing a spun‑off subsidiary on the STAR Market requires the parent company to meet certain size criteria, and that the target subsidiary must also satisfy listing standards, related-party transaction matters may become even more complex. Accordingly, intermediary institutions should strengthen their due diligence on the reasonableness, necessity, and fairness of such transactions.

In addition, Huafu Securities points out that ensuring the truthfulness, accuracy, and completeness of information disclosure—while preventing the transfer of benefits, insider trading, executive corruption, and rent‑seeking through the abuse of power—is a key focus of intermediary institutions’ guidance on going public. The launch of the STAR Market has also served as a pilot for the registration‑based IPO system, with information disclosure at the heart of this framework. Given that spin‑off listings involve the original listed company as well, this places even stricter demands on both the company and the intermediaries regarding their information‑disclosure obligations.

We look forward to more inclusive detailed rules.

Securities offices are closely watching the draft rules on spinning off subsidiaries for listing on the STAR Market, as the implementation of such transactions must strictly adhere to the standards governing spin-off listings by listed companies.

Huafu Securities stated that specific practical implementation will still depend on the issuance of detailed regulations by the regulatory authorities governing the spin-off of listed companies’ subsidiaries for listing on the STAR Market, and that securities offices and other intermediary institutions must exercise utmost diligence and due care.

Great Wall Guorui Securities stated that, as a securities office, and drawing on past domestic spin-off listings, it will place particular emphasis on the specific metrics involved in such transactions—such as the listed company’s asset size, net worth, market capitalization, revenue, and net profit—as well as the parent–subsidiary business, asset, and profitability ratios, the proportion of related-party transactions, and the management’s shareholding ratio. It will also consider the listed company’s scope of operations, the tolerance for intra‑industry competition, the responsibilities and obligations of intermediary institutions, the detailed decision‑making procedures, and the requirements for information disclosure.

Great Wall Guorui Securities believes that the detailed rules for spin-off listings should closely align with the latest developments in the capital market, and that more systematic, STAR Market‑aligned, and inclusive regulations should be formulated and put in place.

A relevant official at Huafu Securities stated that sponsoring institutions are primarily concerned with two key aspects: first, the criteria for spin-off listings, which include requirements regarding the length of time a company has been listed, profitability thresholds, regulations on related-party transactions and intra-industry competition, as well as quantitative benchmarks for the spun‑off subsidiary’s share of the parent company’s assets and profits, and whether any material violations of laws or regulations exist; second, policy measures to safeguard the rights and interests of the listed company’s existing shareholders and creditors.

Track reserve-related operations

Compared with Hong Kong and U.S. stock markets, the STAR Market may command relatively higher valuations. At present, many companies that meet the criteria for spin-off listings are keen to list on the STAR Market and are actively awaiting the release of relevant detailed rules. Meanwhile, some securities offices have begun to position themselves in this area.

A relevant official at Huafu Securities stated that, while awaiting the issuance of specific regulations, the office is actively monitoring and preparing related projects to position itself for future spin-off listings. Notably, some listed companies hold stakes in entities listed on the New Third Board; these New Third Board offices that meet the criteria for listing on the STAR Market will also be key areas of focus going forward.

Great Wall Guorui Securities stated that, since the introduction of the relevant systems for the STAR Market, the company has been closely monitoring and tracking the development trends, regulatory updates, and market conditions surrounding the spin-off listings of listed companies on the STAR Market. Drawing on past rules and guidance on spin-off listings, and in light of the STAR Market’s strategic positioning and innovation-driven requirements, the company has proactively initiated related business preparations. At present, the office has engaged in thorough consultations with several large, diversified publicly listed corporate groups on matters such as spin-off regulations, valuation and pricing, business planning, and equity structure. Going forward, the company will, in accordance with the issuance of relevant operational rules and implementation details by the regulatory authorities, participate, as appropriate, in the shareholding reform and advisory work for the respective subsidiaries.

“The company will prioritize companies listed on the New Third Board in which it holds equity stakes as key candidates for an IPO on the STAR Market,” said Great Wall Guorui. Overall, there are currently more than 10,000 companies on the New Third Board, many of which are well-performing and align with the STAR Market’s positioning. Moreover, these companies have maintained robust compliance throughout their listing on the New Third Board and subsequent regulatory oversight, significantly reducing compliance costs and enhancing listing efficiency, making them a strong pool of potential STAR Market applicants.

Huafu Securities stated that New Third Board companies that meet the listing criteria for the STAR Market are among the key targets to watch in the future.

The China Securities Regulatory Commission has imposed administrative penalties, in accordance with the law, on two cases of violations of information disclosure regulations.

Recently, the China Securities Regulatory Commission imposed administrative penalties in accordance with the law on Huayi Jiaxin for violations of information disclosure regulations, ordering the company to make corrections, issuing a warning, and imposing a fine of RMB 400,000. The directly responsible senior manager, Liu Wei, also received a warning and was fined RMB 200,000. In addition, the Commission issued administrative penalties under the law in the case of Zhuhai Zhongfu’s violations of information disclosure regulations, issuing a warning to Zhuhai Zhongfu and imposing a fine of RMB 600,000. The directly responsible senior managers, Liu Jinzhong, Song Jianming, and Han Huiming, were each issued a warning and fined amounts ranging from RMB 150,000 to RMB 300,000. (For details of the administrative penalty decisions, please refer to the CSRC website.)

In the aforementioned case, Liu Wei, the actual subscriber in Huayi Jiaxin’s non‑public offering of shares and at the time the company’s chairman and general manager, held more than 5% of the company’s shares, making him an associated natural person of the listed company. Consequently, the statement in Huayi Jiaxin’s listing prospectus that “there is no关联 relationship between the subscribers and the Company” constituted a false record; moreover, the figures disclosed in the 2013 and 2014 annual reports regarding Liu Wei’s shareholding quantity and proportion were also materially false. Furthermore, Zhuhai Zhongfu sold 100% of its subsidiary’s equity to an enterprise effectively controlled by its related party, Chen Mouyong, yet failed to disclose this transaction as a related‑party transaction in the relevant announcements, thereby constituting the conduct described in Article 193 of the Securities Law—namely, “making false records, misleading statements, or material omissions in the information disclosed.”

The information disclosure regime is the institutional cornerstone of the capital market’s sound development and a vital safeguard for investors’ right to know. The China Securities Regulatory Commission will, in accordance with the law, take stringent enforcement actions against violations of information disclosure requirements, continuously urge listed companies to disclose, in a truthful, accurate, complete, and timely manner, all information that has a material impact on investors’ investment decisions, and steadily enhance the quality of financial information disclosed by listed companies, thereby effectively protecting the broad investor base’s right to know.

China’s first provincial-level REITs deal in the talent‑rental housing sector has been successfully listed on the Shenzhen Stock Exchange.

On April 8, 2019, the listing ceremony for the first tranche of Hainan Province’s Talent Rental Housing Asset-Backed Special Plan (hereinafter referred to as the Hainan Talent Rental Housing REITs) was held at the Shenzhen Stock Exchange. The Hainan Talent Rental Housing REITs represent the nation’s first provincial‑level talent rental‑housing REIT product and also the first REIT issued by Hainan Province. The launch of this product constitutes an important step in the Shenzhen Stock Exchange’s implementation of the “Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan’s Comprehensive Deepening of Reform and Opening-Up,” helping to advance Hainan’s “One Million Talents Entering Hainan Action Plan.” It also marks a milestone achievement in strengthening the capital market’s ability to serve the real economy and supporting the development of the Hainan Free Trade Pilot Zone and the China‑characteristic Free Trade Port.

The Hainan Talent Rental Housing REIT is jointly led by Zhonglian Qianyuan Real Estate Fund Management Co., Ltd. and Shenzhen Venture Capital Real Estate Fund Management (Shenzhen) Co., Ltd. as the project’s overall coordinator and financial advisor, with ICBC Credit Suisse Investment Management Co., Ltd. serving as the plan manager. The underlying asset is the Yongxiu Garden rental housing complex in Xiuying District, Haikou City, owned by the original rights holder, Hainan Provincial Development Holdings Co., Ltd., which was developed to support talent recruitment in Hainan Province. The offering has a total size of RMB 870 million, with a term of 18 years—featuring open‑ended exit windows every three years—and carries a AAA rating on its senior securities, at a coupon rate of 4.50%, setting a new record for the lowest issuance cost among comparable products issued during the same period. This REIT has undertaken valuable explorations in areas such as state‑asset transfer, the implementation of talent‑rental‑housing policies, and tax structuring, thereby accumulating invaluable experience that will help Hainan Province further leverage REITs to support the development of its free trade zone.

According to a responsible official at the Shenzhen Stock Exchange, since launching China’s first REITs‑like product—the “CITIC Qihang Special Asset Management Plan”—in 2014, the Exchange has consistently spearheaded innovation in the asset securitization sector. It has now established a distinctive Shenzhen‑based REITs market characterized by a diverse range of asset classes, significant innovative impact, and efficient review and listing processes. To date, the Shenzhen Stock Exchange has issued a total of 26 REITs‑like products, with aggregate issuance totaling RMB 54.148 billion, accounting for approximately 60% of the national market. These offerings span a wide array of real estate asset types, including office buildings, shopping centers, retail outlets, hotels, long‑term rental apartments, public talent housing, logistics and warehousing facilities, industrial plants, and industrial parks, thereby becoming a key platform for REITs‑related innovation and practice in China.

Going forward, under the unified leadership of the China Securities Regulatory Commission, the Shenzhen Stock Exchange will actively advance the development of public‑offering REITs, establish a distinctive REITs market segment, and enhance its ability to serve the real economy. To this end, it will continue to: first, building on the experience gained from earlier quasi‑REIT products and the “Penghua Vanke Qianhai REITs” pilot, it will coordinate efforts to conduct research and feasibility studies, formulate relevant rules, implement favorable tax policies for REITs, and foster a sound market environment, thereby laying a robust institutional foundation for the long-term, sustainable growth of the REITs sector; second, align with national strategies by fully supporting innovative pilot programs in regions such as the Xiongan New Area, the Guangdong–Hong Kong–Macao Greater Bay Area, and the Hainan Free Trade Zone. It will prioritize unlocking the value of existing assets in areas like residential rental housing, infrastructure, and commercial properties, strengthen project pipelines and drive innovation, and leverage the capital markets to support high‑quality local economic development.

Commercial & Corporate

The Xi’an Municipal Supervision Bureau has initiated an investigation into Lizhixing and ordered it to promptly arrange for vehicle returns and refunds.

Regarding the widely noted “consumer dispute over a lady’s purchase of a Mercedes-Benz vehicle,” the market supervision authorities of the High-tech Zone recently disclosed updates on the progress of their investigation.

On February 25, 2019, a female complainant entered into an installment‑payment contract with Xi’an Lizhixing Automobile Co., Ltd. (hereinafter referred to as the “Lizhixing” 4S dealership) for the purchase of a brand‑new imported Mercedes-Benz CLS300. After taking delivery of the vehicle on March 27, she alleged engine defects and attempted to negotiate a return or exchange directly with the dealership, but her request was unsuccessful. On April 9, she filed complaints with the Shaanxi Provincial Market Supervision Administration’s 12315 Command Center and the Xi’an Municipal 12345 hotline, seeking a refund. That same day, the High-tech Zone market supervision authority, upon receiving the referral from its superior, promptly assigned staff to address the matter and urged the “Lizhixing” 4S dealership to resolve the consumer’s complaint in accordance with the law. In the afternoon, the complainant returned to the dealership to continue negotiations, and that evening the two parties signed a written agreement for the vehicle’s return and refund. On April 11 and 12, the High-tech Zone market supervision authority conducted successive verifications of the terms of the vehicle‑return and refund agreement; inspected the dealership’s operations; initiated an administrative investigation into suspected quality issues; legally sealed the vehicle involved; and commissioned a qualified testing agency to perform technical inspections. Additionally, the authority held an administrative interview with the dealership’s responsible person and instructed the store to notify Mercedes‑Benz (China) Co., Ltd. to assist in the investigation.

On April 13, the market regulatory authorities once again instructed the “Lizhixing” 4S dealership to promptly arrange for the vehicle’s return and refund. They also heard the complainant’s eight newly submitted requests. That same day, the authorities convened a dialogue between the dealership’s management and the complainant to facilitate a mutually agreeable resolution. During the discussion, the dealership’s representative apologized to the woman for the inconvenience caused by the car purchase and pledged to issue an immediate refund and assume any legal liabilities determined following the regulatory authority’s investigation. The woman expressed her gratitude for the market regulators’ support of consumers but stated that she could not yet accept the dealership’s proposed refund; she indicated her willingness to await the outcome of the investigation and, in accordance with applicable regulations, either have the engine replaced or receive a replacement vehicle.

At present, the market supervision authorities in the High-tech Zone have instructed the “Lizhixing” 4S dealership to continue enhancing communication and resolving consumer complaints. Following investigation and verification of any new claims and supporting evidence submitted by consumers, they will render impartial decisions in accordance with applicable laws and regulations, thereby effectively safeguarding consumers’ legitimate rights and interests and striving to foster a favorable business environment.

Real estate mortgage registration can be processed in a one-stop service.

To address the issue of information silos between real estate registration and financial data, the Ministry of Natural Resources and the China Banking and Insurance Regulatory Commission recently jointly issued a notice stipulating that real estate registration agencies nationwide, in collaboration with banks and other financial institutions, will establish mutual service points for real estate mortgage registration and mortgage lending. These measures will enable businesses and the public to simultaneously sign contracts, obtain loan approvals, and complete real estate mortgage registration, thereby enjoying “one-stop” services.

According to reports, the two departments will integrate their systems to enable online information inquiries and mortgage registration applications, thereby refining the operational procedures for “Internet-plus real estate mortgage registration.” By the end of 2018, the natural resources rights‑conofficeation and registration authorities in all 31 provinces had, in joint documents with banking regulatory bodies or through agreements with banking financial institutions, opened mortgage registration access points or service counters at a total of 4,257 locations across various banks.

Public Consultation on the Provisional Regulations on the Administration of Carbon Emission Trading (Draft for Comments)

Greenhouse gas emissions will be brought under comprehensive control. According to the Interim Regulations on the Administration of Carbon Emission Trading, drafted by the Ministry of Ecology and Environment (hereinafter referred to as the “Regulations”), key emitting entities that fail to rectify violations within the prescribed time limit shall be subject to a fine of no less than RMB 50,000 and no more than RMB 200,000.

The Ministry of Ecology and Environment stated that, in order to standardize carbon emissions trading, strengthen the control and management of greenhouse gas emissions, advance ecological civilization, and promote sustainable economic and social development, it has formulated the Regulations.

The Regulations stipulate that if a key emission entity fails to monitor its greenhouse gas emissions in accordance with the requirements of the State Council’s competent department for ecological and environmental protection, fails to submit greenhouse gas emission reports or verification reports on time, or submits false greenhouse gas emission reports or verification reports, the local ecological and environmental authority shall order it to make corrections within a specified time limit and issue a warning. If the entity refuses to make corrections after the deadline, it shall be subject to a fine of no less than RMB 50,000 but no more than RMB 200,000, and the authority shall commission a verification body to conduct a verification; based on the verification results, the entity’s greenhouse gas emissions and related data shall be determined.

In accordance with the Regulations, if a verification body engages in fraud during verification, charges fees to key emission units, or discloses the commercial secrets of key emission units, the local ecological and environmental authorities shall order it to make corrections within a specified time limit, confiscate any illegal gains, and impose a fine of no less than RMB 20,000 but no more than RMB 100,000. If the entity fails to comply after the deadline or if other serious circumstances exist, it shall be prohibited from conducting verification activities.

With respect to key emitting entities, verification bodies, other entities voluntarily participating in carbon emissions trading, and other relevant entities and individuals that refuse or obstruct supervision and inspection, the Regulations stipulate that the local ecological and environmental authorities shall order them to make corrections within a specified time limit and issue a warning. If they fail to comply after the deadline, the violating entity shall be subject to a fine of no less than RMB 20,000 but no more than RMB 100,000, and the violating individual shall be subject to a fine of no less than RMB 1,000 but no more than RMB 5,000.

At present, the Regulations are being publicly consulted.

This year’s new policies for wind and solar power have been unveiled, introducing a subsidy‑bidding system.

Just one day after releasing the “Work Plan for Promoting the Development of Wind and Photovoltaic Power Projects Achieving Grid Parity Without Subsidies (Draft for Comments),” the National Energy Administration yesterday unveiled three additional documents: the “Notice on Relevant Requirements for the Management of Wind and Photovoltaic Power Project Development in 2019 (Draft for Comments)” (hereinafter referred to as the “Draft for Comments”), the “2019 Work Plan for Wind Power Project Development,” and the “2019 Work Plan for Photovoltaic Power Project Development” (hereinafter referred to as the “Plans”). These documents signify that the highly anticipated new policies for the wind and photovoltaic industries have finally been announced.

The Draft for Soliciting Opinions stipulates that priority shall be given to developing wind and photovoltaic power projects that achieve grid parity. Provincial energy authorities, in accordance with relevant notices, shall assess and demonstrate the conditions for implementing grid-parity wind and photovoltaic projects within their respective regions. On the basis of coordinating with grid enterprises to verify and secure the transmission and consumption capacities required for proposed new grid-parity projects, they shall give precedence to advancing such projects. For provinces (autonomous regions, municipalities directly under the central government) that, after thorough assessment, are found not to meet the conditions for developing grid-parity projects, a reasonable total scale of projects eligible for national subsidies shall be determined by comprehensively considering relevant planning, transmission infrastructure, and consumption capacity. Eligible projects will then be selected through standardized competitive procedures, in line with the requirements for competitive allocation applicable to both wind and photovoltaic power projects.

The Draft for Comments also stipulates that power transmission and consumption conditions must be strictly enforced, with priority given to ensuring the transmission and grid integration of unsubsidized (parity‑price) projects. The siting, approval, and construction of wind and photovoltaic power generation projects shall all comply with the relevant requirements for wind‑power investment monitoring and early warning, as well as for monitoring and evaluating the market environment of photovoltaic power generation.

The regulations governing subsidy‑based competitive bidding for new photovoltaic projects are also clearly set out in the document. The draft for public comment stipulates that project allocation shall be conducted through a standardized competitive process. On the basis of prioritizing the development of grid‑parity projects, provincial energy authorities shall employ competitive mechanisms to allocate wind and solar PV projects that require national subsidies. The competitive allocation procedures must strictly adhere to the principles of openness, fairness, and impartiality, with the feed-in tariff serving as a key criterion; priority should be given to projects with lower subsidy levels and steeper phase‑out schedules. Meanwhile, relevant dispatched agencies are tasked with strengthening oversight of the competitive allocation of wind and solar PV projects across all provinces, autonomous regions, and municipalities directly under the central government.

The Plan stipulates that, in principle, all newly built photovoltaic power generation projects eligible for national subsidies shall have their project selection and subsidy allocation determined through market mechanisms via competitive bidding. For 2019, the total budget allocated for new PV project subsidies amounts to RMB 3 billion, of which RMB 750 million is earmarked for residential PV systems (equivalent to 3.5 million kW), while the remaining RMB 2.25 billion will be used to organize the development of competitively bid subsidy projects (excluding poverty‑alleviation PV schemes).

“Within a single day, multiple documents were released simultaneously—covering the submission of grid‑parity wind and solar projects as well as the competitive bidding for solar subsidies—deserving high praise,” said Shi Jingli, a researcher at the Energy Research Institute of the National Development and Reform Commission and Director of the Policy Research Department at the National Renewable Energy Center, in an interview yesterday. She noted that the new policy first underscores a market‑oriented approach: with the exception of residential and poverty‑alleviation projects, both utility‑scale plants and distributed systems will have their projects and tariff levels (including subsidies) determined through competitive allocation. A second key feature is fiscal prudence: in 2019, total subsidy funding for projects amounts to RMB 3 billion, with project categories managed separately and funds allocated in distinct tranches. Furthermore, the documents reiterate that grid‑parity projects take priority, followed by competitively bid subsidy projects, while imposing strict early‑warning management and conditioning eligibility on power transmission and consumption capacity, with requirements for securing land or site availability.

Regarding the regulations on subsidy bidding, she believes that although the 2019 photovoltaic pricing policy has not yet been released, the adoption of a bid‑adjustment‑based ranking ensures that projects across different regions and categories can demonstrate economic viability and competitiveness, while maintaining consistency and continuity with previous mechanisms. Furthermore, the requirement that 2019 subsidized projects must be connected to the grid within the year—otherwise, grid connection may be delayed by up to two quarters, with a quarterly tariff reduction of RMB 0.01 per kilowatt-hour—effectively clarifies the construction timeline. “The document is comprehensive, and its overall framework and guiding principles largely align with industry expectations,” said Shi Jingli.

Taxation TAXATATION

Tax cuts for small and micro enterprises are being fully implemented, and the VAT reform is taking root.

As most small-scale taxpayers file on a quarterly basis, and corporate income tax is paid in quarterly installments, the April filing period marks the first quarterly return period following the implementation of the universal tax and fee reduction policies for micro and small enterprises, making it a critical window for the full realization of these benefits and for the concentrated manifestation of their fiscal impact.

Combining universal tax cuts with targeted structural reforms is a key feature of this year’s tax and fee reduction policy. Among the nearly RMB 2 trillion in tax and fee reductions for 2019, the deepened VAT reform—expected to deliver over RMB 1 trillion in tax cuts—has emerged as the centerpiece. Effective April 1, the VAT reform took effect, benefiting all general VAT taxpayers. Yet even with favorable policies in place, effective implementation is essential. For businesses to truly reap the benefits of these tax cuts, tax authorities must exert substantial effort in areas such as policy publicity and guidance, as well as the precise delivery of services.

Since the announcement in early March of a larger‑scale package of tax and fee reductions, the State Taxation Administration has issued a total of 12 policy documents on this front, including seven related to the deepening reform of the value‑added tax. From the national level down to provincial, municipal (district), and county tax authorities, leading groups have been established to oversee the implementation of these measures, operating under a “top‑leader responsibility” system. A detailed task list and action roadmap have been drawn up, breaking down the work into more than 170 specific tasks, with progress tracked through visual management and rolled out at every administrative tier. In addition, supporting measures such as tax collection and administration reforms, system optimization, policy interpretation, and training and guidance have been steadily put into place as the tax filing period approaches, continuously unleashing the driving force that ensures the effective implementation and sustained impact of the tax and fee reduction policies.

In April, as spring returns to the land, it is a season of busyness—and even more so, a season for sowing hope. As Wang Jun, Party Secretary and Director of the State Taxation Administration, stated at the launch ceremony of the 28th National Tax Publicity Month, the tax authorities will deliver the tangible benefits of tax and fee reductions to households across the country with the greatest effort, the highest quality of service, and the strictest standards.

Litigation & Arbitration

Major Announcement: The Supreme People’s Procuratorate Has Issued New Regulations to Strengthen and Standardize Case Guidance.

In order to strengthen and standardize the case‑guidance work of the procuratorial organs, leverage the exemplary and leading role of guiding cases in prosecutorial case handling, promote strict and impartial administration of justice by the procuratorial organs, and ensure the uniform and correct application of the law, the Supreme People’s Procuratorate recently issued the revised “Regulations of the Supreme People’s Procuratorate on Case‑Guidance Work” (hereinafter referred to as the “Regulations”).

The Regulations further clarify the issuing authority and criteria for guiding cases, emphasizing that guiding cases issued by the procuratorial organs must be promulgated by the Supreme People’s Procuratorate. Such cases shall meet four conditions: the outcome of the case has attained legal effect; the procedural handling complies with statutory requirements; they provide guidance for handling similar cases in terms of fact-finding, evidence admissibility, application of law, policy interpretation, and investigative methods; and they effectively reflect the functions and roles of the procuratorial organs, yielding positive political, legal, and social outcomes.

The Regulations further refine the procedures for soliciting and selecting guiding cases, clearly defining the specific responsibilities of provincial-level procuratorates in collecting, reviewing, and recommending candidate cases. Under the Regulations, provincial-level procuratorates are tasked with collecting, organizing, and reviewing candidate guiding cases within their jurisdictions, as well as submitting them to the Supreme People’s Procuratorate. The procuratorate or prosecutor handling a case may recommend candidate guiding cases to the provincial-level procuratorate. Meanwhile, the various departments and the Legal and Policy Research Office of the provincial-level procuratorate shall submit candidate guiding cases to the corresponding departments of the Supreme People’s Procuratorate. If, following a preliminary review, the Supreme People’s Procuratorate determines that a case is eligible to be considered a candidate guiding case, it shall notify the provincial-level procuratorate that made the recommendation to forward the case file.

The Regulations stipulate that the Legal Policy Research Office of the Supreme People’s Procuratorate shall coordinate and oversee the initiation, review, promulgation, and periodic review of guiding cases. The various procuratorial departments of the Supreme People’s Procuratorate, together with the Legal Policy Research Office, shall assume respective responsibilities for the research and drafting of guiding cases. Each procuratorial department shall undertake the research and drafting of guiding cases within its own area of jurisdiction, while the Legal Policy Research Office shall be responsible for drafting guiding cases that involve the work of multiple procuratorial departments or pertain to topics designated by the leadership of the Procuratorate.

The Regulations further refine the composition of the Case Guidance Committee, stipulating that it shall comprise a deputy procurator-general in charge of the Legal and Policy Research Office of the Supreme People’s Procuratorate, full-time members of the Procuratorial Committee, heads of certain procuratorial departments or national experts in procuratorial practice, as well as legal scholars. At the same time, the Regulations emphasize that the Case Guidance Committee shall conduct regular reviews of case guidance work and submit an annual special report to the Procuratorial Committee.

The Regulations stipulate that procuratorates at all levels shall, by analogy, handle similar cases in accordance with guiding cases; they may cite relevant guiding cases to provide legal interpretation and reasoning, but may not substitute such cases for laws or judicial interpretations as the direct basis for decision‑making in individual cases. When the Procuratorial Committee of a procuratorate at any level deliberates a case, the handling prosecutor shall report whether there are any analogous guiding cases and explain how they have been applied by reference.

The Regulations stipulate that the Supreme People’s Procuratorate shall establish a database of guiding cases to facilitate retrieval, consultation, and reference by people’s procuratorates at all levels and the general public. Procuratorates at all levels shall incorporate guiding cases into their professional training and strengthen efforts to study and apply them.

The Regulations also specify four circumstances under which a guiding case shall be declared invalid: when the law or judicial interpretation cited in the case is repealed; when it conflicts with a newly promulgated law or judicial interpretation; when it is superseded by a newly issued guiding case; and other circumstances where invalidation is warranted.

Opinions on Several Issues Concerning the Handling of Criminal Cases Involving “Loan Traps”

In order to continuously and thoroughly advance the special campaign against organized crime and evil forces, accurately identify and severely punish, in accordance with the law, those engaged in “loan‑trapping” criminal activities, and in compliance with the provisions of the Criminal Law, the Criminal Procedure Law, relevant judicial interpretations, as well as the “Guiding Opinions on Several Issues Concerning the Handling of Cases Involving Organized Crime and Evil Forces” issued by the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice, the following opinions are hereby put forward regarding the handling of criminal cases involving “loan‑trapping”:

I. Accurately Distinguishing “Loan Traps” from Private Lending

1. “Loan trapping” is a generic term for illegal and criminal activities in which, with the intent of unlawful appropriation, perpetrators disguise their schemes as private lending to induce or coerce victims into signing “loan” agreements or related arrangements that are, in substance, disguised forms of “loan,” “mortgage,” or “guarantee.” They then fabricate false creditor‑debtor relationships by inflating loan amounts, deliberately triggering defaults, arbitrarily declaring defaults, and destroying evidence of repayment, before using litigation, arbitration, notarization, or resorting to violence, threats, and other means to unlawfully seize the victims’ property.

2. “Loan‑sharking schemes” differ fundamentally from civil loan relationships formed between equal parties based on freedom of contract. In private lending, the lender seeks to recover the principal and earn interest upon maturity in accordance with the agreed terms; such transactions are not motivated by an intent to unlawfully appropriate another’s property, nor do they involve practices such as artificially inflating the loan amount, fabricating false evidence of disbursement, maliciously inducing default, arbitrarily declaring default, or destroying or concealing evidence of repayment during the negotiation or performance of the loan agreement.

In judicial practice, it is important to distinguish between cases arising from illegal debt collection and “routine loan” schemes. Where the suspect or defendant lacks the intent to unlawfully appropriate the funds and has not employed deceptive practices to fabricate false creditor‑debtor relationships with the borrower, such conduct should not be characterized as a “routine loan” scheme. If the use of violence, threats, or other coercive means to forcibly recover debts constitutes a criminal offense, the offender shall be convicted and punished in accordance with the specific facts of the case.

3. In practice, the common criminal methods and procedures of “routine loan” schemes include, but are not limited to, the following scenarios:

(1) Creating the illusion of private lending. Suspects and defendants often advertise themselves under such names as “small‑loan companies,” “investment offices,” “consulting agencies,” “guarantee companies,” or “online lending platforms,” luring victims into borrowing by touting low interest rates, no collateral, no guarantees, and rapid disbursement. They then use false pretexts—such as “security deposits” or “industry practices”—to induce victims, based on mistaken beliefs, to sign loan agreements or related contracts with artificially inflated amounts. In some cases, suspects and defendants further pressure victims into signing such overinflated loan agreements or related documents by citing prior defaults on earlier loans.

(2) Fabricating false payment records, such as bank transaction histories. The suspect or defendant transfers funds to the victim’s account in accordance with an artificially inflated “loan” agreement, thereby creating the appearance—through bank statements—that the entire loan amount has been disbursed. Subsequently, they employ various methods to reclaim all or part of those funds, leaving the victim either without having received any money at all or only partially receiving the sums reflected in the loan agreement and bank records.

(3) Intentionally creating defaults or arbitrarily declaring defaults. Suspects and defendants often set default traps or erect obstacles to repayment, deliberately causing the victim to default, or, by arbitrarily deeming a default to have occurred, forcibly demand that the victim repay fictitious debts.

(4) Maliciously inflating the loan amount. When the victim is unable to repay, some suspects or defendants arrange for their affiliated company or designated related companies and individuals to settle the “loan” on the victim’s behalf, after which they enter into a new, artificially inflated “loan” agreement or related contract with the victim. Through this practice of “transferring accounts to balance books” and “repaying loans with new loans,” they continue to escalate the victim’s “debt.”

(5) Combining soft and hard tactics to collect debts. When the victim has failed to repay the inflated “loan,” the suspect or defendant resorts to litigation, arbitration, notarization, or employs violence, threats, and other means to demand repayment of the “debt” from the victim or from persons closely related to the victim.

II. Severely Punish “Loan‑Trap” Crimes in Accordance with the Law

4. In the course of carrying out “routine loan” schemes, where no overt violence or threats are employed and the conduct as a whole is characterized by the intent to unlawfully appropriate property through fabricating facts and concealing the truth to defraud victims of their assets, such acts shall generally be prosecuted and punished as fraud. Where, in the course of implementing a “routine loan” scheme, multiple methods are combined, giving rise to offenses such as fraud, extortion, illegal detention, false litigation, provoking trouble, forced transactions, robbery, or kidnapping, the applicable penalties shall be determined on a case-by-case basis, distinguishing among the various circumstances and imposing cumulative punishment for multiple offenses or selecting the more severe offense in accordance with the Criminal Law and relevant judicial interpretations.

5. Where multiple persons jointly commit the crime of “routine loan” fraud, those suspects or defendants who play a principal role in the offense shall be deemed principal offenders and bear criminal liability for all offenses they have participated in or organized and directed; those who play a secondary or auxiliary role shall be deemed accomplices.

Where a person knowingly assists another in committing the crime of “routine loan” fraud and falls under any of the following circumstances, such person shall be prosecuted as an accomplice to the relevant offense, unless otherwise provided by the Criminal Law or judicial interpretations:

(1) Organizing the sending of “loan” messages and advertisements to lure and introduce victims to “borrowing”;

(2) Providing financial resources, premises, bank cards, bank accounts, vehicles, or other forms of assistance;

(3) Selling, providing, or assisting in the acquisition of citizens’ personal information;

(4) Assisting in the fabrication of accounting records and other false evidence of payments;

(5) Assisting with notarization procedures;

(6) Assisting in the filing of a lawsuit or arbitration based on false facts;

(7) Assisting in cashing out, withdrawing cash, handling the transfer of movable or immovable property, and otherwise transferring criminal proceeds and any income derived therefrom;

(8) Other circumstances that meet the requirements for joint criminal liability.

　In the aforementioned provisions, the phrase “knowing that another person is committing the crime of ‘routine loan’” shall be determined through a comprehensive analysis that takes into account both subjective and objective factors, including the actor’s cognitive capacity, prior experience, frequency and methods of conduct, relationships with co‑defendants and victims, circumstances of profit‑seeking, whether the actor has previously been punished for ‘routine loan’ offenses, and whether the actor deliberately sought to evade investigation or prosecution.

6. When determining the amount involved in “routine loan” offenses, such amounts should be distinguished from those in private lending and subjected to an overall negative assessment. Any property illegally appropriated by the suspect or defendant under such designations as “artificially inflated debt,” “interest,” “security deposits,” “intermediation fees,” “service fees,” or “penalty clauses” shall all be included in the calculation of the criminal proceeds.

The principal amount actually paid by the suspect or defendant to the victim shall not be included in the criminal amount.

Where the crime of “routine loan” has already been initiated but was not completed due to reasons beyond the perpetrator’s control, the offense may be treated as attempted, with the amount of property unlawfully appropriated at the time of initiation serving as the basis for determining the degree of attempt. If both completion and attempt are present, and the completed and attempted portions correspond to different statutory sentencing ranges, the court shall first decide whether to mitigate punishment for the attempted portion and determine the applicable statutory range for that portion; it shall then compare this range with that of the completed portion, selecting the range imposing the heavier penalty and, where appropriate, imposing a more severe sentence. If both portions fall within the same sentencing range, the court shall, in light of the circumstances, impose a more severe penalty on the completed portion.

7. All property obtained through the illegal practice of “routine loan” schemes by criminal suspects or defendants shall be confiscated or ordered to be returned; lawful property belonging to victims shall be promptly returned. Where evidence demonstrates that a sum of principal was paid by the suspect or defendant to the victim in order to carry out such a scheme, any surplus remaining after compensating the victim for their losses shall be confiscated in accordance with the law.

If the suspect or defendant has used the illegally obtained proceeds to repay debts, transfer such assets, or encumber them with other rights, and one of the following circumstances applies, the proceeds shall be recovered in accordance with the law:

(1) A third party who knowingly accepts property that is the proceeds of an offense;

(2) Where a third party acquires illegally obtained property gratuitously or at a price significantly below market value;

(3) Where a third party has obtained illicit proceeds through unlawful debt repayment or illegal and criminal activities;

(4) Other circumstances where recovery shall be pursued in accordance with the law.

8. Where “loan‑trapping” schemes are perpetrated against elderly persons, minors, students, or individuals who have lost the capacity to work, or where such schemes result in the victim or a close relative committing suicide, dying, suffering mental illness, or engaging in criminal activities to repay the “debt,” penalties shall, unless otherwise provided by the Criminal Law or judicial interpretations, be imposed more severely at the court’s discretion.

While upholding the principle of strict punishment in accordance with the law, defendants who plead guilty and accept punishment, actively return illicit gains, sincerely repent, or otherwise demonstrate statutory or discretionary mitigating circumstances may be given more lenient treatment in accordance with the law.

9. With respect to perpetrators of “routine loan” crimes, the severity of property-based penalties shall be increased in accordance with the specific offenses they have committed. Where the conditions set forth in Article 37‑1 of the Criminal Law are met, they may, in accordance with the law, be prohibited from engaging in relevant professions.

10. A relatively stable criminal organization consisting of three or more persons formed for the purpose of committing “loan‑sharking schemes” shall be deemed a criminal syndicate. The principal offender shall be punished for all crimes committed by the syndicate.

Where the criteria for identifying organized crime and evil forces are met, investigations, prosecutions, and trials shall be conducted in accordance with the provisions governing triad-like organizations, evil forces, or criminal groups of evil forces.

III. Determining Jurisdiction over Criminal Cases Involving “Loan Traps” in Accordance with the Law

11. “Loan‑sharking” criminal cases are generally investigated by the public security organ at the place where the crime was committed. However, if it is more appropriate for the public security organ at the suspect’s place of residence to initiate and conduct the investigation, such organ may do so. The “place of the crime” includes both the location where the criminal act occurred and the location where the criminal consequences arose.

“The place where the criminal act occurred” includes the location of the company established to carry out “routine loan” schemes, the place where the “loan” agreement or related agreements were executed, the site where illegal debt-collection activities were conducted, the locations of the courts, arbitration commissions, and notary institutions that accepted cases involving litigation, arbitration, or notarization undertaken for the purpose of implementing “routine loans,” as well as the preparatory, initiating, transit, and terminating locations of such “routine loan” activities.

“The place where the criminal result occurs” includes the place of payment, the place where the illicit proceeds were actually obtained, the place where they were concealed, the place where they were transferred, the place where they were used, and the place where they were sold, among others.

Except in the place where the crime was committed or where the suspect resides, public security organs in other localities shall promptly accept “loan‑sharking” cases reported through citizen apprehension, police reports, complaints, denunciations, or voluntary surrenders by suspects. Upon review, if there are grounds to believe that a criminal offense has been committed, such cases shall be transferred to the competent public security organ for handling.

Criminal cases involving “routine loan” schemes perpetrated by organized crime and evil forces shall be investigated by the public security organs that are handling cases related to triad-like organizations, evil forces, or criminal groups of evil forces.

12. Where any of the following circumstances exist, the relevant public security organs may, within the scope of their duties, consolidate cases for joint investigation:

(1) Where a person commits multiple offenses;

(2) In cases of joint crime;

(3) When a suspect in a joint crime has also committed other crimes;

(4) Where crimes committed by multiple suspects are directly related, consolidating the cases for joint handling is conducive to ascertaining the facts of the case.

13. These Opinions shall take effect as of April 9, 2019.

Arrests in organized crime and gang-related cases are being carried out in tandem with asset recovery, safeguarding legitimate rights and interests.

In the special campaign to eradicate organized crime and evil forces, the National Anti-Black-and-Evil Forces Office has issued its latest guiding opinions, calling for the thorough dismantling of the economic foundations of such criminal organizations, the simultaneous pursuit of arrests and asset investigations, and due attention to safeguarding the legitimate rights and interests of defendants and third parties during enforcement.

On April 9, the National Anti-Black-and-Evil Campaign Office issued four guidelines on handling cases related to the campaign. These guidelines address the “Opinions on Several Issues Concerning the Disposition of Property in Criminal Cases Involving Black-and-Evil Forces,” jointly promulgated by the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice (hereinafter referred to as the “Opinions”). (Subheading) The apprehension of suspects involved in black-and‑evil crimes and the thorough investigation of related assets shall proceed in parallel.

The issue of defining assets involved in organized crime and evil forces has drawn widespread attention, and this year the National Anti-Black-and-Evil Campaign Office has designated “striking at finances to cut off funding” as one of the key priorities of the special campaign.

Chen Guoqing, Deputy Director of the National Anti-Black-and-Evil Campaign Office and Vice Procurator-General of the Supreme People’s Procuratorate, stated that this year’s special campaign to combat organized crime and evil forces will prioritize “deep investigation and thorough eradication.” While severely cracking down on and punishing crimes involving organized crime and evil forces, emphasis will be placed on addressing the underlying conditions that give rise to such criminal activities. “Obtaining economic benefits through organized illegal and criminal activities or other means” is the primary objective of organized crime and evil‑force offenses. These criminal organizations often leverage economic gains to sustain their illicit operations, enabling them to grow stronger and eventually evolve into mafia‑type organizations. Chen Guoqing emphasized that dismantling the economic foundations of such crimes is a central focus of the campaign; accurately identifying and defining the assets involved in these criminal organizations is a prerequisite for cutting off their financial lifelines, as financial resources determine the scale and strength of these groups. Drawing on lessons learned from judicial practice, the “Opinions” provide clear definitions of assets linked to organized crime and evil‑force offenses in the following areas: first, property belonging to the criminal organization itself; second, property personally owned by the suspect; third, property under the suspect’s actual control; fourth, property purchased with funds provided by the suspect; fifth, property transferred by the suspect into another person’s name—where leads must be thoroughly investigated in accordance with the law; sixth, assets implicated in suspected money laundering or in concealing or disguising proceeds of crime and related gains; and seventh, any other assets connected to the criminal organization and its unlawful activities. “We require that the apprehension of individuals involved in organized crime and evil‑force offenses proceed in tandem with a comprehensive investigation into the assets they hold, so as to legally and thoroughly dismantle the economic foundations of these criminal networks,” Chen Guoqing said.

(Subheading) The value of confiscated and recovered assets must be equivalent to prevent infringement of the legitimate rights and interests of relevant parties.

The aforementioned “Opinions” also introduce a new provision regarding the handling of assets involved in organized crime and gang-related offenses: “seizure and confiscation of other property of equivalent value.” The document specifies that if evidence demonstrates that assets subject to lawful seizure or confiscation cannot be located, have been acquired in good faith by another party, have lost their value, or have become intermingled with lawful property in an inseparable manner, then other property of equivalent value may be seized or confiscated. Chen Guoqing acknowledged that, to avoid ambiguity in interpreting “cannot be located,” this version of the “Opinions” clarifies that “cannot be located” means there is evidence indicating the existence of assets that should legally be seized or confiscated, yet their whereabouts or destination remain unverifiable. If the defendant disputes this, they must present relevant evidence. The “Opinions” further emphasize that the amount of other property of equivalent value to be seized or confiscated shall correspond to the value of the specific assets that cannot be directly seized or confiscated.

“When resorting to the confiscation of property of equivalent value, there must be evidence demonstrating that the property cannot be located, has been acquired in good faith by another party, has lost its value, or has become mixed with other lawful assets and is indivisible. Only under these circumstances may the measure of confiscating property of equivalent value be initiated,” said Chen Guoqing. He added that the principle of equivalence in the amount of property is also a key emphasis of these Opinions: the value of the confiscated property must correspond precisely to the amount of the涉案 property that is legally subject to recovery or confiscation, and it must consist of property of equivalent value. During enforcement, due consideration must be given to safeguarding the legitimate rights and interests of both the defendant and third parties. How can the legitimate rights and interests of the defendant and third parties be protected? To this end, the Opinions stipulate that, once the facts of the relevant illegal or criminal conduct have been verified as true, any lawful property—along with its fruits or proceeds—belonging to victims, bona fide third parties, or other persons, where ownership is clearly established and undisputed, shall, provided that returning such property would not prejudice the interests of other stakeholders nor impede the normal handling of the case, be promptly returned in accordance with the law after being duly registered, photographed, or video‑recorded.

Other

The CPC Central Committee has completed the second round of centralized review and cleanup of Party regulations and normative documents.

The Decision of the CPC Central Committee on Abolishing, Declaring Invalid, and Amending Certain Party Regulations and Normative Documents was recently issued. The issuance of this Decision marks the successful completion of the second round of centralized review and cleanup of central Party regulations and normative documents, which was launched in November 2018.

The Central Committee has decided that, with respect to the central Party regulations and normative documents subject to this review, 54 shall be repealed, 56 shall be declared invalid, and 8 shall be amended. In addition, a package of amendments will be made to 14 central Party regulations related to the reform of Party and state institutions. This comprehensive review is of great significance for thoroughly implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 19th National Congress of the Communist Party of China, for upholding the unity and authority of Party regulations and Party policies, and for accelerating the establishment of a sound and well‑structured system of Party regulations.

The central authorities have stipulated that all regulations and normative documents that are repealed or declared invalid shall cease to be enforced as of the date of promulgation of the relevant decision. With respect to those regulations and normative documents that are subject to amendment, the relevant central and state organs shall promptly advance the amendment process to ensure that the task is completed with high quality and efficiency.

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