Supreme Court Delivered Decision on the Split of Jurisdiction between CIETAC and its former Shanghai Branch and South China Branch

China International Economic and Trade Arbitration Commission ("CIETAC") is one of the most well-known arbitration committee in China on foreign related contract disputes. CIETAC had two branches, Shanghai and South China. In 2012, the branches, due to disagreement with the headquarters on the new charters, declared independence from CIETAC and later changed their names into Shanghai International Economic and Trade Arbitration Commission ("SHIETAC") and South China International Economic and Trade Arbitration Commission ("SCIETAC").

Such disagreements between the three arbitral entities caused a lot of disputes as which entity has the jurisdiction over cases that the parties had agreement on arbitration at CIETAC Shanghai or South China branches. In some cases, the losing parties petition with court regarding the validity of the arbitral awards, and in some other cases, the respondent petition with court regarding the validity of the arbitration agreement and jurisdiction of the arbitral entity. However, all the courts nationwide had to wait for the Supreme Court to issue the final decision regarding such matters.

After almost 2 years’ waiting, the Supreme Court promulgated the Official Reply to Issues concerning the Judicial Review Case Involving Arbitral Award Made by China International Economic and Trade Arbitration Commission and Its Original Branch and Other Arbitral Authorities (the "Official Reply"), which shall come into force as of July 17, 2015.

The Official Reply specifies that, if the arbitration agreement between the parties were signed before the change of names of the two former branches, the SCIETAC and SHIETAC shall have jurisdiction; if the arbitration agreement between the parties were signed after the change of names of the two former branches, CIETAC shall have jurisdiction. 

Furthermore, it is invalid that the arbitral entity makes decision on the jurisdiction over the case upon the request by the applicant to the case. The other party may still request the same with the court.

Customs General of China: Collective Taxation to Be Generalized throughout China

Recently, the General Administration of Customs has promulgated the Announcement on Generalizing Collective Taxation throughout China (the "Announcement"), for implementation as of July 27.

The Announcement sets out that the General Administration of Customs has decided to comprehensively generalize the reform of collective taxation, under which the Customs shall carry out collective taxation on goods imported and exported by qualified import and export taxpayers for several times within a certain period. According to the Announcement, enterprises subject to the mode of collective taxation shall be business units indicated on the import and export declarations, and shall meet the following conditions: 1. users of electronic payment system of customs duties; 2. business category of general certification or above; 3. average not less than four times tax payment for each month in the previous natural year; 4. enterprise reporting in line with requirements of provisions, provide data and information necessary for the Customs document examination and verification, comply with laws and regulations of the Customs on tax levy and administration and pay taxes timely; 5. without other circumstances not suitable for collective taxation. In addition, the Announcement stipulates that an enterprise shall apply for implementing collective taxation to the functional department of Customs tariff directly under the government of its registration place.

Domestic and Foreign-invested Enterprises Permitted to Engage in Production and Sales of Game and Entertainment Equipment

Recently, the Ministry of Culture has promulgated the Circular on Permitting Domestic and Foreign-invested Enterprises to Engage in the Production and Sales of Game and Entertainment Equipment (the "Circular").

In the Circular, the game and entertainment equipment includes electronic game players used in business premises and those used with television receiver equipment, as well as handheld electronic game players, but excludes the game and entertainment equipment for export sales. The Circular puts forward that enterprises are encouraged and supported to research, develop, produce and sell intellective, educational, motion sensing and bodybuilding game and entertainment equipment with independent intellectual property rights, embodying national spirit as well as with healthy and progressive contents. The production and sales in China of game and entertainment equipment having prohibited contents prescribed in Article 13 of the Administrative Regulations on Entertainment Places or safety hazards or installed with devices that have such gambling functions as refunding coins, points or steel balls are strictly prohibited. Furthermore, the game and entertainment equipment producers and sellers shall establish a system of content self-examination, and strengthen the training for review staff.

(Source: www.mcprc.gov.cn)

Matters relating to Investment in Inter-bank Market by Relevant Overseas Institutional Investors Specified

On July 14, the People's Bank of China ("PBC") issued the Circular on Matters relating to the Investment in Inter-bank Market with Renminbi by Overseas Central Banks, International Financial Organizations and Sovereign Wealth Funds (the "Circular").

The Circular specifies that with the view of entering into the inter-bank market, a relevant overseas institutional investor shall submit the Chinese Inter-bank Market Investment Registration Form to the PBC by means of mailing of the original thereof or submission by an inter-bank market settlement agent, etc. After registration, a relevant overseas institutional investor may conduct bond transfers, bond repos, bond lending, forward bond transactions, interest rate swap, forward interest rate agreement and other transactions permitted by the PBC on the inter-bank market. A relevant overseas institutional investor may determine investment scale at its sole discretion. Besides, a relevant overseas institutional investor shall conduct, as a long-term investor, transactions according to reasonable needs of maintenance and appreciation of assets value. The PBC will manage the transaction behaviour of a relevant overseas institutional investor in the principle of parity of both parties and according to macro-prudential requirements.

(Source: www.pbc.gov.cn)