NDRC's Measures on outbound investment clash with MOFCOM
September 22, 2012 | BY
clpstaff &clp articlesDraft Measures from the NDRC should simplify procedures for outbound investment, but have raised fears of conflict with China's other regulators over who gives the first approval
The National Development and Reform Commission (NDRC) published the Administrative Measures for Approval of Outbound Investment Projects (Draft for Consultation) (《境外投资项目核准管理办法（征求意见稿）》) on August 16 2012.
The draft Measures remove NDRC approval for outbound investments made by an overseas subsidy of a domestic company, giving provincial-level Development and Reform Commissions (DRCs) the power to approve certain projects and simplifying procedures for overseas bids and acquisitions.
The battle for authority
Article 24 of the Measures states that approval must first be obtained from the NDRC, before the country's other regulators such as the Ministry of Commerce (MOFCOM), State Administration of Foreign Exchange (SAFE) and the State Administration of Taxation (SAT) can approve the outbound investment.
In theory, this means that the NDRC's approval supersedes that of the other regulators and should be obtained first. “The current practice is that for some cases NDRC approval is obtained before MOFCOM's approval. However, in some cases the approvals are obtained in parallel with MOFCOM,” said He Fang, a partner with Jun He Law Offices in Beijing.
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