Tax rebates go up on some exports
March 26, 2009
CHINA will increase the tax rebate rates on some textile, iron and steel, nonferrous metal, petrochemical, electronics and light industrial exports starting on Wednesday.
The decision was made yesterday at an executive meeting of the State Council. The Cabinet agreed that it was necessary to raise tax rebates on some export products to fully implement the country’s economic stimulus package and the support plans for 10 industries.
The exact amounts of the rebate were not revealed by the State Council.
China has raised the export tax rebate rate for textiles four times since last August. It was increased previously in February from 14 percent to 15 percent.
China’s exports plummeted 25.7 percent year-on-year in February, the worst decline in more than a decade, as global demand deteriorated amid the deepening recession.
Tags: China, tax rebate, export productsRelated Posts:
How To Shut Down Your China Business?
March 25, 2009
On November 19, China’s Commerce, Foreign Affairs, Public Security and Justice, issued Working Guidelines on Cross-border Pursuit of Liability and Initiation of Legal Action by Relevant Interested Parties in Connection with Abnormal Withdrawal from China of Foreign Investors. The mere fact that these four ministries got together on this at the inception of massive factory shutdowns in China is a good indication of how important these guidelines are meant to be.
The aim of the guidelines is to prevent foreign-invested enterprises (FIEs), or more realistically the owners and managers that run them, from shutting down their China operations without “undertaking proper closure procedures” relating to “creditors, employees, and other affected parties.”
China’s Company Law states that foreign individual or corporate shareholders can, under certain circumstances, be held civilly liable for the obligations of their China company. In legal speak, this means that creditors may pierce the corporate veil to get at those who own and/or run the foreign company doing business in China.
Though leaving in the middle of the night has some obvious short term advantages, the reality is that the smarter long term decision will likely be to follow China’s company dissolution rules. There are a couple reasons for this. First, China claims it will pursue you for liability back in your home country. And though I have my doubts about their actual resolve and ability to do this, it certainly is not a good thing to be facing a law suit where you live. Second, if you ever want to go back to China for any reason, leaving a whole slew of creditors hanging high and dry is not the way to get that coveted China visa. We have heard through reliable sources that those who “abandon” China will/have become persona non grata and will never be allowed back. Are you really reading to foreclose the opportunity of ever doing business in or with China again?
Not that proper dissolution is cheap or easy, as it typically involves the following:
- Informing all creditors of the closing
- Resolving all pending transactions
- Settling all outstanding taxes.
- Liquidating company property
- Officially de-registering the company with the government
If company assets are insufficient to pay the company’s outstanding debt, it should file for bankruptcy.
Source: Harris & Moure, pllc
Tags: shutdowns, china company, businessRelated Posts:
Non-ferrous metal industry sees signs of rebound
March 20, 2009
China’s non-ferrous metal industry is showing some signs of recovery with major companies recording narrower losses, an industry association official said on Thursday.Sixty-nine of the country’s leading 73 non-ferrous companies recorded a combined loss of 3.8 billion yuan ($556 million) in the Jan-Feb period, according to Kang Yi, chairman of the China Non-Ferrous Metals Industry Association (CNIA).
The average monthly net loss, or 1.9 billion yuan, is much lower than the loss of 5.9 billion yuan major metal companies recorded in December 2008, Kang said, adding 53 metal companies saw their losses narrow during the first two months of this year.
For the 2008 full year, the industry earned a profit of about 80 billion yuan, down 45 percent compared with 2007, according to the association.
Source: China Daily
Tags: Yuan, industry, metalsRelated Posts:
Civil Procedure Law of the Peoples Republic of China – Arbitration
March 19, 2009
Chapter XXVIII Arbitration
Article 257 In the case of a dispute arising from the foreign economic, trade, transport or maritime activities of China, if the parties have had an arbitration clause in the contract concerned or have subsequently reached a written arbitration agreement stipulating the submission of the dispute for arbitration to an arbitral organ in the People’s Republic of China handling cases involving foreign element, or to any other arbitral body, they may not bring an action in a people’s court.
If the parties have not had an arbitration clause in the contract concerned or have not subsequently reached a written arbitration agreement, they may bring an action in a people’s court.
Article 258 If a party has applied for property preservation measures, the arbitral organ of the People’s Republic of China handling cases involving foreign element shall refer the party’s application for a decision to the intermediate people’s court of the place where the party against whom the application is made has his domicile or where his property is located.
Article 259 In a case in which an award has been made by an arbitral organ of the People’s Republic of China handling cases involving foreign element, the parties may not bring an action in a people’s court. If one party fails to comply with the arbitral award, the other party may apply for its enforcement to the intermediate people’s court of the place where the party against whom the application for enforcement is made has his domicile or where his property is located.
Article 260 A people’s court shall, after examination and verification by a collegial panel of the court, make a written order not to allow the enforcement of the award rendered by an arbitral organ of the People’s Republic of China handling cases involving foreign element, if the party against whom the application for enforcement is made furnishes proof that:
(1) the parties have not had an arbitration clause in the contract or have not subsequently reached a written arbitration agreement;
(2) the party against whom the application for enforcement is made was not given notice for the appointment of an arbitrator or for the inception of the arbitration proceedings or was unable to present his case due to causes for which he is not responsible;
(3) the composition of the arbitration tribunal or the procedure for arbitration was not in conformity with the rules of arbitration; or
(4) the matters dealt with by the award fall outside the scope of the arbitration agreement or which the arbitral organ was not empowered to arbitrate.
If the people’s court determines that the enforcement of the award goes against the social and public interest of the country, the people’s court shall make a written order not to allow the enforcement of the arbitral award.
Article 261 If the enforcement of an arbitral award is disallowed by a written order of a people’s court, the parties may, in accordance with a written arbitration agreement reached between them, apply for arbitration again; they may also bring an action in a people’s court.
Chapter XXIX Judicial Assistance
Article 262 In accordance with the international treaties concluded or acceded to by the People’s Republic of China or with the principle of reciprocity, the people’s courts of China and foreign courts may make mutual requests for assistance in the service of legal documents, in investigation and collection of evidence or in other litigation actions.
The people’s court shall not render the assistance requested by a foreign court, if it impairs the sovereignty, security or social and public interest of the People’s Republic of China.
Article 263 The request for the providing of judicial assistance shall be effected through channels provided in the international treaties concluded or acceded to by the People’s Republic of China; in the absence of such treaties, they shall be effected through diplomatic channels.
A foreign embassy or consulate accredited to the People’s Republic of China may serve documents on its citizens and make investigations and collect evidence among them, provided that the laws of the People’s Republic of China are not violated and no compulsory measures are taken.
Except for the conditions provided in the preceding paragraph, no foreign organization or individual may, without the consent of the competent authorities of the People’s Republic of China, serve documents or make investigations and collect evidence within the territory of the People’s Republic of China.
Article 264 The letter of request for judicial assistance and its annexes sent by a foreign court to a people’s court shall be appended with a Chinese translation or a text in any other language or languages specified in the relevant international treaties.
The letter of request and its annexes sent to a foreign court by a people’s court for judicial assistance shall be appended with a translation in the language of that country or a text in any other language or languages specified in the relevant international treaties.
Article 265 The judicial assistance provided by the people’s courts shall be rendered in accordance with the procedure prescribed by the laws of the People’s Republic of China. If a special form of judicial assistance is requested by a foreign court, it may also be rendered, provided that the special form requested does not contradict the laws of the People’s Republic of China.
Article 266 If a party applies for enforcement of a legally effective judgment or written order made by a people’s court, and the opposite party or his property is not within the territory of the People’s Republic of China, the applicant may directly apply for recognition and enforcement to the foreign court which has jurisdiction. The people’s court may also, in accordance with the relevant provisions of the international treaties concluded or acceded to by China, or with the principle of reciprocity, request recognition and enforcement by the foreign court.
If a party applies for enforcement of a legally effective arbitral award made by an arbitral organ in the People’s Republic of China handling cases involving foreign element and the opposite party or his property is not within the territory of the People’s Republic of China, he may directly apply for recognition and enforcement of the award to the foreign court which has jurisdiction.
Article 267 If a legally effective judgment or written order made by a foreign court requires recognition and enforcement by a people’s court of the People’s Republic of China, the party concerned may directly apply for recognition and enforcement to the intermediate people’s court of the People’s Republic of China which has jurisdiction. The foreign court may also, in accordance with the provisions of the international treaties concluded or acceded to by that foreign country and the People’s Republic of China or with the principle of reciprocity, request recognition and enforcement by a people’s court.
Article 268 In the case of an application or request for recognition and enforcement of a legally effective judgment or written order of a foreign court, the people’s court shall, after examining it in accordance with the international treaties concluded or acceded to by the People’s Republic of China or with the principle of reciprocity and arriving at the conclusion that it does not contradict the basic principles of the law of the People’s Republic of China nor violates State sovereignty, security and social and public interest of the country, recognize the validity of the judgment or written order, and, if required, issue a writ of execution to enforce it in accordance with the relevant provisions of this Law; if the application or request contradicts the basic principles of the law of the People’s Republic of China or violates State sovereignty, security and social and public interest of the country, the people’s court shall not recognize and enforce it.
Article 269 If an award made by a foreign arbitral organ requires the recognition and enforcement by a people’s court of the People’s Republic of China, the party concerned shall directly apply to the intermediate people’s court of the place where the party subjected to enforcement has his domicile or where his property is located. The people’s court shall deal with the matter in accordance with the international treaties concluded or acceded to by the People’s Republic of China or with the principle of reciprocity.
Article 270 This Law shall come into force as of the date of promulgation, and the Civil Procedure Law of the People’s Republic of China (for Trial Implementation) shall be abrogated simultaneously.
Related Posts:
Procedures for Arbitration in China
March 18, 2009
After exchanging documents and appointing arbitrators, the CIETAC will fix a hearing date. In some cases, the parties may elect to conduct the proceedings on a documents-only basis and dispense with the oral hearing. It can be done subject to the agreement of both parties and the tribunal. Documents-only arbitration is suitable for cases where there is no substantial dispute on matters of facts.
The three arbitrators will make an award after the hearing. If the arbitrators cannot reach a unanimous decision, it will be decided by simple majority. The Arbitration Rules provide that the tribunal shall render an award within six months after the tribunal is formed, although this time limit can be extended by the CIETAC. Delays are not unusual in practice, bearing in mind the fact that the three arbitrators involved may reside in different jurisdictions, and the award must be reviewed and approved by the CIETAC before it is issued. The award comes into legal effect the date on which it is made. If no time limit is specified in the award, the parties must automatically take it into effect; otherwise, they must execute the award within the time limit specified.
The tribunal has the power to decide in the award the arbitration fees and expenses to be paid by the parties to the CIETAC as well as any compensation for expenses occurred to be paid to the winning party.
If any claims or counterclaims were omitted from the award, either party has 30 days from the receipt of the arbitral award to request in writing an additional award. If the tribunal finds that such an omittance exists, they have 30 days from the receipt of the request to make an additional award. Similarly, the tribunal can on its own initiative make an additional award within a “reasonable period of time” following the arbitral award.
At any time before the final award is made, a partial award may be made on any issue, provided that it is considered necessary by the tribunal or that the parties request an award and the tribunal accepts. Failure to perform the award will not affect the continuation of proceedings nor prevent the tribunal from making a final award.
The Arbitration Rules also provide for a summary procedure to be followed where either parties with a disputed amount below RMB 500,000 or parties with a disputed amount above RMB 500,000 but who agree, in writing, to a summary procedure. Upon accepting the application for the summary procedure, the CIETAC shall issue a Notice of Arbitration. Only one arbitrator, who should be appointed by the parties by agreement within 15 days after receipt of the Notice, will preside over the summary procedure, failing which the Chairman of the CIETAC will appoint an arbitrator for the parties. Either oral hearing or a document-only arbitration may be adopted, as the CIETAC deems fit.
The time limits for filing of documents and publication of award under the summary procedures are shorter than those under normal procedures. The Respondent should file the defence and counterclaim within 20 days after the receipt of the Notice of Arbitration. The award shall be given within three months from the date that the tribunal was formed.
Tags: Respondent, jurisdictions, arbitrationRelated Posts:
