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MOFCOM Amends and Releases FIE Complaint Measures 

Published: September, 2020

Submission: September, 2020

 



In recent years, foreign investment laws and regulations have undergone sweeping reform of which the complaint mechanism introduced under the new Foreign Investment Law and its implementing regulations for foreign invested enterprises (FIEs) is particularly noteworthy. Although the PRC Ministry of Commerce (MOFCOM) has already issued the Tentative Measures for Work on Complaints from Foreign Invested Enterprises (Tentative Measures) in 2006, with the support of the aforesaid higher-level laws, MOFCOM conducted a comprehensive and systematic overhaul of the Tentative Measures and reissued the Measures for Work on Complaints from Foreign Invested Enterprises (Measures) on 25 August 2020. The Measures will take effect from 1 October 2020. Compared to the Tentative Measures, the Measures have been improved by broadening the scope of complainants/complaint matters, improving the complaint working mechanism, clarifying the complaint working rules and enhancing the protection of rights and interest. Set forth below is a brief summary of some of the highlights in the Measures.


Item


Tentative Measures


Measures


Brief Comments


Complainant


FIEs and their investors


FIEs, foreign investors, chambers of commerce, industrial associations


Foreign investors are no longer limited to those of FIEs


Respondent


Administrative organs


Administrative organs (including organisations legally authorised and charged with the responsibility to manage public affairs) and their staff


Scope of respondents expanded to include those staff who are responsible for detailed implementation


Complaint matters


Infringement of lawful rights, reporting of problems, and putting forward suggestions, opinions or requests


Infringement of lawful rights, reporting of problems in the investment environment and proposing improvements on policies and measures


Complaint matters further clarified


Complaint handling agency


National Complaint Centre for FIE, local complaint handling agencies


Ministerial Joint Conference System and Office, National Complaint Centre for FIE, local complaint handling agencies


Establishing permanent ministerial joint conference system is conducive to resolving national foreign investment issues across different ministries


Complaint materials


Materials not specified, to be written in Chinese


Materials specified, can be written in foreign language and submitted with Chinese translation


Increased transparency on complaint materials and flexibility on language requirement to better suit the needs of foreign investors


Entrusted complaint


Not specified


Can entrust an agent to lodge complaints


Entrusted complaints offer convenience to foreign investors


Complaint handling


Issuance of opinion, coordinate with relevant departments, transfer to relevant departments for handling, other appropriate means


Facilitating the reaching of a mutual understanding between the complainant and the respondent (including settlement agreement), coordinating with the respondent, proposing policy improvement suggestion to relevant departments, and other appropriate means


Conferring binding legal effect on the result of conciliation through settlement agreement facilitates its due execution and observance. Whether or not a settlement agreement can be reached is subject to the wishes of the parties involved


Termination of complaint


Termination of the handling of a complaint does not require the complainant’s consent


Termination of the handling of a complaint requires the complainant’s consent (other than termination attributable to the complainant’s conduct). Complaints not concluded within 1 year from inception ought to be reported to the government of the same level


Requirement for consent of the complainant to terminate a complaint may to a certain extent avoid the evasion of responsibility on the handling of complaint processing work, and reporting of long-outstanding complaint to the government can facilitate the resolution of some of the complicated problems


Appeal of complaint


Not specified


Complainant dissatisfied with non-acceptance of the complaint or the handling result may lodge an appeal to the higher-level complaint handling agency


The appeal system may help to resolve certain problems which could not be settled because of local political constraints or protectionism


Protection of the complainant’s rights


Complaint handling agencies shall keep confidential the trade secrets of the complainant, except for special circumstances prescribed by law


The launching of a complaint shall not prejudice the right to seek for administrative review, administrative and other legal proceedings; complaint handling agencies shall keep in confidence the trade secrets, confidential business information and personal privacy of the complainant; complainant shall not be suppressed or retaliated


Providing more robust protection to safeguard the complainant’s right to complain


Management of complaint handling


No specific stipulation


Complaints to be archived; complaint handling work to be reported to higher-level complaint handling agencies every other month, common and non-compliance issues to be reported to ministerial joint conference office through National Complaint Centre for FIE, annual FIE rights and interests protection proposal to be submitted


A nationwide system of feedback and summary is conducive to overseeing the work of complaint handling agencies at all levels, gaining a fuller picture of the issues in practice and facilitating the resolution of different complaints


 


While enhancing the protection of the rights and interests of the complainants, the Measures also clarify their obligations. For instance, the complaint process may terminate if the complainant, after being contacted by the complaint handling agency, fails to participate in the complaint process for 30 consecutive days without justifiable reasons.


Vitality of the law depends on its effective implementation while attraction of foreign investment depends on a sound investment environment. The Measures undoubtedly provide a way to enhance both.


 



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