Ministry of Commerce order No. 4 of 2020 list of unreliable entities

SMM News: decree No. 4 of the Ministry of Commerce of the people's Republic of China on the list of unreliable entities, which has been approved by the State Council, is hereby promulgated and shall enter into force as of the date of promulgation.

The list of unreliable entities stipulates

Article 1 in order to safeguard state sovereignty, security and development interests, maintain a fair and free international economic and trade order, and protect the legitimate rights and interests of Chinese enterprises, other organizations or individuals, these provisions are formulated in accordance with the Foreign Trade Law of the people's Republic of China, the National Security Law of the people's Republic of China and other relevant laws.

Article 2 the State shall establish a list system of unreliable entities and take corresponding measures against the following acts of foreign entities in international economic, trade and related activities:

(1) endangering China's national sovereignty, security and development interests;

(2) to discontinue normal transactions with Chinese enterprises, other organizations or individuals in violation of normal market trading principles, or to take discriminatory measures against Chinese enterprises, other organizations or individuals, seriously harming the legitimate rights and interests of Chinese enterprises, other organizations or individuals.

The term "foreign entity" as mentioned in these provisions includes foreign enterprises, other organizations or individuals.

Article 3 the Chinese Government adheres to an independent foreign policy, adheres to the basic norms of international relations such as mutual respect for sovereignty, non-interference in each other's internal affairs and equality and mutual benefit, opposes unilateralism and protectionism, and resolutely upholds the country's core interests. safeguard the multilateral trading system and promote the building of an open world economy.

Article 4 the State shall establish a working mechanism (hereinafter referred to as the working mechanism) with the participation of the relevant departments of the central state organs, which shall be responsible for the organization and implementation of the list system of unreliable entities. The working mechanism office is located in the competent department of commerce under the State Council.

Article 5 the working mechanism shall, in accordance with its functions and powers or in accordance with the suggestions and reports of the parties concerned, decide whether to investigate the conduct of the foreign entity concerned; if it decides to conduct an investigation, it shall make a public announcement.

Article 6 the working mechanism may investigate the conduct of the relevant foreign entities by questioning the parties concerned, consulting or copying relevant documents, materials and other necessary means. During the period of investigation, the foreign entity concerned may make a statement and plead.

The working mechanism may decide to suspend or terminate the investigation in the light of the actual situation; if there is a major change in the facts on which the decision to suspend the investigation occurs, the investigation may be resumed.

Article 7 the working mechanism shall, on the basis of the results of the investigation, comprehensively consider the following factors, make a decision on whether or not to include the relevant foreign entities in the list of unreliable entities, and make a public announcement:

(1) the degree of harm to China's national sovereignty, security and development interests;

(2) the extent of damage to the legitimate rights and interests of Chinese enterprises, other organizations or individuals;

(3) whether it conforms to the prevailing international economic and trade rules;

(4) other factors that should be considered.

Article 8 where the facts concerning the conduct of a foreign entity are clear, the working mechanism may directly and comprehensively consider the factors provided for in Article 7 of these provisions and make a decision on whether or not to include it in the list of unreliable entities; if the decision is to be included, it shall be announced.

Article 9 the announcement of the inclusion of the relevant foreign entity in the list of unreliable entities may indicate the risk of conducting transactions with the foreign entity, and may, in the light of the actual situation, specify the time limit for the foreign entity to correct its conduct.

Article 10 for foreign entities listed on the list of unreliable entities, the working mechanism may, in the light of the actual situation, decide to adopt one or more of the following measures (hereinafter referred to as treatment measures) and make a public announcement:

(1) to restrict or prohibit them from engaging in import and export activities related to China;

(2) to restrict or prohibit its investment within the territory of China;

(3) to restrict or prohibit the entry of relevant personnel, means of transport, etc.;

(4) to restrict or cancel the work permit, stay or residence qualification of its relevant personnel within the territory of China;

(5) to impose a corresponding amount of fine according to the seriousness of the circumstances;

(6) other necessary measures.

The treatment measures prescribed in the preceding paragraph shall be implemented by the relevant departments in accordance with the division of duties according to law, and other relevant units and individuals shall cooperate with them.

Article 11 where the time limit for correction of relevant foreign entities is specified in the announcement of the inclusion of relevant foreign entities in the list of unreliable entities, the measures provided for in Article 10 of these provisions shall not be taken against them within the time limit; if the relevant foreign entities fail to correct their acts within the time limit, measures shall be taken to deal with them in accordance with the provisions of Article 10 of these provisions.

Article 12 where the relevant foreign entity is restricted or prohibited from engaging in import and export activities related to China, and Chinese enterprises, other organizations or individuals really need to trade with the foreign entity under special circumstances, they shall apply to the Office of the working Mechanism and may conduct corresponding transactions with the foreign entity upon consent.

Article 13 the working mechanism may, in the light of the actual situation, decide to remove the relevant foreign entity from the list of unreliable entities; if the relevant foreign entity corrects its behavior and takes measures to eliminate the consequences of the act within the time limit specified in the announcement of correction, the working mechanism shall make a decision to remove it from the list of unreliable entities.

The foreign entity concerned may apply for its removal from the list of unreliable entities and the working mechanism decides whether or not to remove it according to the actual situation.

The decision to remove the relevant foreign entity from the list of unreliable entities shall be announced; as of the date of publication of the announcement, the measures taken in accordance with the provisions of Article 10 of these provisions shall cease to be implemented.

Article 14 these provisions shall enter into force as of the date of promulgation.

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