In the news: Law firm tenders, Defamation Interpretation and visa waiting times
September 18, 2013 | BY
clpstaff &clp articles &Law firms are forced to use agencies to apply for tenders with SOEs as the government cracks down on corruption. An Interpretation on defamation could better protect foreign companies and executives are unhappy over new visa waiting times
SOEs outsource law firm tenders
Legal Week reported that law firms are paying agencies like CITIC International Tendering and China CNTC International Tendering Corporation to submit panel applications for state-owned enterprises (SOEs). A Beijing partner at an international law firm said he paid Rmb1000-2000 ($150-300) for proposal documents and a further Rmb7000 after being selected. The main driver for using such agencies is so SOEs can show that there was no bribery or corruption associated with the bids.
Partners have said they find the process unnecessary and burdensome. What the practice shows is that SOEs are obviously feeling the need to guard themselves from potential bribery and corruption probes. There are also complaints that the agencies are ill-equipped to deal with the applications as they have little or no knowledge of the legal sector. It is unfortunate that SOEs have to go to such lengths and law firms are also taking a beating for it. This seems to be just another cost of doing business in China.
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Defamation Interpretation released
The Supreme People's Court (SPC) and the Supreme People's Procuratorate (SPP) released the Interpretation on September 6. Under the Interpretation, internet users who make defamatory comments which are visited by 5,000 users or reposted more than 500 times could face up to three years in prison. It is thought the move is in response to campaigns against online rumours.
This Interpretation has become known as the 5,000 click rule and has been seen by some as a crackdown on internet users that accuse government officials of wrongdoing. However, the Interpretation will also cover users that seek to defame foreign companies in China. Attacks against foreign companies have increased in recent years and online criticism can hurt sales and reputations. There might be a way for foreign companies to actually use this Interpretation to protect their reputation during attacks.
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A full text translation and a feature article on the Interpretation will be available at the beginning of October
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Execs upset over visa waiting times
Reuters has reported that foreign executives are unhappy with the latest changes to visa approval times under the PRC Entry-exit Administration Regulations for Foreigners (中华人民共和国外国人入境出境管理条例). The regulations came out on July 12 and became effective on September 1 and propose that passports can be held by the authorities for up to 15 days while residence visas are being processed. This is 10 days longer than the previous time limit imposed. The article from Reuters said that top executives being grounded for such a long period of time would cause losses to the company.
The Regulations are still quite new and increasing the time limit to 15 days was more about China's need to deal with a large volume of applications and the time needed to conduct thorough checks. Hopefully it will be the case that if a foreigner is not applying for their first residence visa the process may be faster. The Regulations are not unlike many other countries that impose the same or lengthier waiting periods on visa approvals.
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