CHINA LAW DIGEST NEWSLETTER
Vol. 1, No.8 - September 6, 2002
TOPICS THIS ISSUE:
- Regulations on Foreign Investment in Civil Aviation
- Notice on Issues Related to the Launch of Pilot Projects for the Establishment of Foreign Invested Logistics Enterprises
- Provisional Regulations for the Administration of Internet Publishing
- Law of the People's Republic of China on Government Procurement
- Reply of the Supreme People's Court on Whether or Not the Injured Parties in a Product Tort Case Can Make the Product's Trademark Holder a Defendant in Civil Litigation
Regulations on Foreign Investment in Civil Aviation
Issue Date: June 21, 2002
Issuing Authority: Ministry of Foreign Trade and Economic Cooperation, State
Development and Planning Committee
Effective Date: August 1, 2002
Summary:
The Regulations replaced the former policy of foreign invested civil aviation, which was issued in 1994. It specifies that foreign investors (companies or individuals) may invest in civil aviation including civil airports, public air transport enterprises, general-purpose aviation enterprises and projects related to air transport. However, the Regulations prohibit foreign investors from investing or managing air traffic control systems. Foreign investors may establish civil aviation companies by setting up equity joint ventures (JVs) or contractual joint ventures with Chinese parties. Foreign investors may also purchase shares of an existing civil aviation company including stock issued overseas or B shares issued by a domestic civil aviation company.
When foreign investors invest in civil airports, the Chinese party must hold the relative controlling percentage of total shares in the JVs. If foreign investors invest in public air transportation enterprises, the Chinese party must hold majority shares. Meanwhile, the proportion of investment held by any one foreign investor (including its affiliates) may not exceed 25% of the total investment.
If foreign investors invest in general-purpose aviation enterprises involving business flight, air tour, aircraft maintenance with an obligation to undertake business in the international maintenance market or aviation oil projects, the Chinese party shall also hold the majority shares.
Notice on Issues Related to the Launch of Pilot Projects for the Establishment of Foreign Invested Logistics Enterprises
Issue Date: June 20, 2002
Issuing Authority: Ministry of Foreign Trade and Economic Cooperation
Effective Date: 30 days after it was issued.
Summary:
The Notice lifted the ban on foreign investment in the area of logistics in China. It provides that foreign investors may establish joint venture logistics enterprises in the pilot areas of Beijing, Tianjin, Shanghai, Chongqing, Zhejiang, Jiangsu, Guangdong and the Shenzhen Special Economic Zone.
Under the Notice, foreign invested logistics enterprises (FILE) refer to those foreign invested companies that are engaged in ways of organically combining stages such as the transporting, storing, loading, unloading, processing, packaging, distributing, information processing and import/export stages so as to form a comparatively integrated supply chain and that provide multiple function integration services to users.
A FILE may conduct international logistics business and third party logistics business. International logistics means import/export business, while third party logistics includes road transportation of normal goods and management of logistic business by using computer networks.
The registered capital of a FILE shall not be lower than US$5 million. Meanwhile, foreign investors shall not take more than 50% of the total shares in a FILE.
Provisional Regulations for the Administration of Internet Publishing
Issue Date: June 27, 2002
Issuing Authority: State press and Publications Administration, Ministry of
Information Industry
Effective Date: August 1, 2002
Summary:
"Internet Publishing" refers to the online transmission acts, by Internet information service providers, of posting on the Internet, or sending to user terminals through the Internet, after selecting and editing works created by themselves or others for the purpose of browsing, reading, using or downloading by the public. The works include 1) formally published books, newspapers, magazines, audio-visual products, electronic-publishing; 2) edited works of literature, arts and natural science, social science and engineering technology.
Approval must be obtained before conducting any Internet Publishing activities. Any Internet Publishing activity conducted without approval may result in business closedown, the loss of illegal earnings through confiscation and a fine of up to RMB 50,000.
The Provisional Regulations also restrict certain contents to be published on the Internet, such as those that oppose to the Constitution Law or those forbidden by other laws and regulations. If the contents of Internet Publishing are not true or fair and causes infringement of the legal interests of others, the Internet Publishing organization shall make public corrections and eliminate any side effects. It shall also bear civil liabilities.
Law of the People's Republic of China on Government Procurement
Issue Date: June 29, 2002
Issuing Authority: Standing Committee of the People's Congress
Effective Date: January 1, 2003
Summary:
"Government Procurement" refers to the activities of government agencies, institutional units and organizations at all levels to procure goods, construction or services in accordance with the centralized procurement lists or which exceed procurement threshold standards by using government funds. The Government Procurement includes the activities of purchasing, renting, entrusting or hiring.
The primary method for Government Procurement is through open tender. Other methods may include 1) tender by invitation; 2) competitive negotiations; 3) single-source procurement; 4) request for quotations and other methods recognized by the government procurement regulatory department of the State Council. The Law also provides for circumstances whereby the above-mentioned methods can be taken and the process that a government department shall follow when making Government Procurement.
If the implementation of a legally established Government Procurement contract shall cause damage to the interests of the state and the society, parties of the Government Procurement contract shall amend, suspend or terminate the contract. The party in default shall be responsible for the liabilities.
Reply of the Supreme People's Court on Whether or Not the Injured Parties in a Product Tort Case Can Make the Product's Trademark Holder a Defendant in Civil Litigation
Issue Date: July 11, 2002
Issuing Authority: The Supreme Court
Effective Date: July 28, 2002
Summary:
The Reply confirms that trademark holders can be joined as defendants in a product liability action. The query was raised by the Beijing Higher People's Court regarding a car accident case, in which the General Motors Corporation as the trademark owner, the General Motors Overseas Corporation and the General Motors Brazil Ltd. were joined as defendants.
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