How to Send Data in Chinese Concept Share Audit Papers Abroad?

By You Yunting 

China and the US recently signed the Audit Supervision CooperationAgreement, allowing supervisors and inspectors of the Public CompanyAccounting Oversight Board (PCAOB) to review audit materials of Chinesecompanies listed in the US in Hong Kong, including complete audit paperscontaining all information. According to media reports, Alibaba, JD and YumChina are the first businesses to be audited. Audit papers contain largeamounts of data and personal information of domestic users (collectively“data”). I would like to discuss whether the audit paper review by the US partiesis outbound data transfer and what procedures should be followed to transferthe data abroad according to Chinese laws.......................More 

Legal Protection of a Play’s Digital Derivatives (Part I) 

By Lv Xuanxuan

Digital collectibles (artworks) that emerged over the past year or so are a hottopic in culture and art. As one example, an artist uploads a digital file ofpainting, audio, video or creative works in other forms onto a third partyplatform, creates a file copy on the digital book of a block chain as “NFT” andbacks it up with encrypted currency. As another example, a performanceorganizer sells tickets with characters in a play (art images) on a third partyplatform. Digital collectibles (artworks) come from “NFT” applications. “NFT”technology is used to record ownership of artworks or collectibles and otherassets. “NFT” is the abbreviation of “Non-Fungible Tokens” which according toCollins English Dictionary means a digital certificate registered in a block chain and is usually translated into Chinese as "non-homogenous tokens".......................More 

1. Regulations on Several Issues Connected with People Freed on Bail Pending Trial

Promulgated by Supreme People’s Court, Supreme People’s Procuratorate, Ministry of PublicSecurity and Ministry of National Security

Promulgation date: 21 September 2022

Implementation date: 21 September 2022

Document number: GTZ[2022]25

To better regulate people freed on bail pending trial and prevent failure to or negligence in theregulation, the Regulations mainly puts forward the following measures.

First, the scope of activities of people freed on bail is clarified. To meet the practical regulatoryrequirements, the Regulations further specifies the “specific places”, “specific people” and“specific activities” in Article 71 of the Criminal Procedural Law so that enforcement authoritiescan understand and put these provisions into practice and people freed on bail can clearly knowthe scope of their activities.

Second, the duty of reporting of people freed on bail outside the place of the trial is clarified. TheRegulations requires people freed on bail outside the place of the trial report to the enforcementauthority within five days after receipt of the decision to free them on bail. In addition, itstipulates the circumstances and sanctions for people freed on bail who fail to report within thespecific period of time to ensure they report on time and are legally regulated.

Third, punishments for people freed on bail who violate rules are specified. Chapter Five of theRegulations is about punishments for violation by people freed on bail, further clarifyingconditions and procedures relating to bail confiscation, fines for guarantors, public securitysanctions, arrest, etc. to ensure provisions relating to people freed on bail are fully brought into effect. (Source: SPC website)

https://www.court.gov.cn/fabu-xiangqing-372491.html

2、Instructions on Regulating Discretionary Power of Market Regulation Authorities inAdministrative Penalties

Promulgated by State Administration for Market RegulationPromulgation date: 10 October 2022
Implementation date: 10 October 2022
Document number: GSJFG[2022]2

To fully implement the new Administrative Punishment Law, the Instructions mainly revises theprovisions in the old instructions that are not consistent, connected with or subsidiary to the newlaw to ensure appropriate implementation of laws, rules and regulations. To meet relevantrequirements of the State Council, it includes provisions relating to formulation of benchmarksand administration for discretionary power in administrative penalties to establish a system thatpromotes appropriate discretionary power in administrative penalties and guarantees the legalbasis for benchmarks for the administrative penalty decisions. To meet the current needs of lawenforcement for market regulation, it includes the principle of fairness and justice in exercise ofthe discretionary power in administrative penalties, and provisions relating to flexible applicationof the benchmarks for discretionary power in administrative penalties and clarification ofapplication of these benchmarks in the administrative penalty decision, etc. in order to activelyrespond to social concerns and reflect the harmonious relationship between the force andleniency of law. (Source: SAMR website)

https://gkml.samr.gov.cn/nsjg/fgs/202210/t20221010_350620.html

3、Instructions on Promoting Sound Development of Property and Right Financing Business 

Promulgated by China Banking and Insurance Regulatory Commission and People’s Bank of 

ChinaPromulgation date: 29 September 2022

Document number: YBJF[2022]29

The Instructions mentions greater efforts to provide property and right financing services,reasonable expansion of the scope of pledge, use of property and right financing to give supportin weak areas, and differentiation in management of property and right financing. TheInstructions proposes to support banking institutions to deepen innovation of property and rightfinancing business, enhance the quality and efficiency of receivables financing, optimize financingbusiness of commodity and property in goods and develop supply chain based receivablesfinancing and other businesses and a full range of digital financial products for the supply chain.The Instructions requires banking institutions to increase the ability to control property financingrisks, strengthen the evaluation of the value of property and rights, classify loans and managethem differently, explore an online system used as the main approach to “three issues” relatingto inspection of loans for supply chain financing, meet the requirement of registration andannouncement of guarantee on mortgage, regulate mortgaged property management andcooperation in supervision with third parties, promote application of new technology to mortgagemanagement and broaden the channels for realization of property. (Source: CBIRC website)

http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=1075590&itemId=928

4. Circular on Transitional Changes in Residential House Loan Differentiation Policy

Promulgated by China Banking and Insurance Regulatory Commission and People’s Bank of China

Promulgation date: 29 September 2022

The Circular stipulates that 1. for cities where the sale prices of new commercial residentialhouses continue decreasing from June to August 2022 when compared with the previous three-month period of time and the same period of time last year, the lower limit on the interest rateof borrowings for individuals buying the first commercial residential house will be relaxed for a transitional period of time by the end of 2022 with the lower limit for the second house inaccordance with the current provisions; and 2. by following the principle of “one city, one policy”,governments of the above eligible cities have the discretion to remain, relax or lift the lower limiton the interest rate of borrowings for individuals buying the first commercial residential house inthe local area by cooperating with the provincial self-regulated mechanism for market interestrate determination under the guidance of agencies of China Banking and Insurance RegulatoryCommission and the People’s Bank of China. (Source: PBC Website)

http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4671913/index.html

5. Circular on Matters Connected with Stronger E-cigarette Regulation

Promulgated by State Administration of Tobacco 

Promulgation date: 29 September 2022 

Document number: GYB [2022] 118

The Circular deals with three issues, including legal production and business operation of entitieson the e-cigarette market, re-statement of relevant prohibitions and appropriate handling ofproblems that have existed during the transitional period. The Circular requires that from 1October 2022, entities engaged in production and management of e-cigarette on the e-cigarettemarket should have the tobacco monopoly license and carry out production and businessactivities in accordance with the Tobacco Monopoly Law (Amended in 2015), the TobaccoMonopoly Law Enforcement Rules (Amended in 2021), E-cigarette Management Rules,mandatory national standards relating to e-cigarette, and relevant policies and rules by the StateTobacco Bureau. E-cigarette manufacturers, atomized product manufacturers, e-cigarette nicotinemanufacturers, e-cigarette wholesellers, e-cigarette retailers, etc. with legitimate tobaccomonopoly licenses should transact business through the e-cigarette transaction managementplatform. (Source: SAT website)

http://www.tobacco.gov.cn/gjyc/tzgg/202209/b092e633daab4b24bc1cc623463bf32c.shtml 

6. Announcement of Personal Income Tax Policy in Favor of Residents Substituting NewResidential Houses for Old Ones

Promulgated by Ministry of Finance and State Administration of Taxation 

Promulgation date: 30 September 2022

Document number: MOF and SAT Announcement 30, 2022

The Announcement provides that from 1 October 2022 to 21 December 2023, personal incometax on the house owner who sells his/her own residential house and buys a new residential housewithin one year after having sold the old house will be refunded. If the purchase price of the newhouse is higher than or equal to the sale price of the old house, the personal income tax will befully refunded. If the purchase price of the new house is lower than the sale price of the old one,the personal income tax will be refunded in the proportion of the price of the new house to thatof the old one. (Source: MOF website)

http://szs.mof.gov.cn/zhengcefabu/202209/t20220930_3844156.htm 

Picture of the month: 

Photographer: Yingying, Lawyer

Caption: Chongqing, Oct 2022