Rewin Law Firm: Interpretation on Provisions on the Unreliable Entity List
The Ministry of Commerce of the People's Republic of China promulgated the "Provisions on the Unreliable Entity List" ("Provisions") on September 19, 2020 through its official website and shall be effective as of this day. Since the promulgation of the Provision, it has attracted great attention from the domestical and foreign media and the public. Now, let us take a look on the specific provisions and corresponding measures.
The purpose of the Provisions
1. Article 2 of the Provisions states that China will take relevant measures against foreign entities that violate normal market trading principles, interrupt normal transactions with Chinese enterprises, other organizations or individuals, or take discriminatory measures against Chinese enterprises, other organizations or individuals, seriously damaging the legitimate rights and interests of Chinese enterprises, other organizations or individuals.
2. The main purpose of the Provisions is to protect the legitimate rights and interests of Chines enterprises, other organizations and individuals, correct the illegal acts the illegal acts of certain foreign entities, safeguard China’s sovereignty, security, and development interests, and uphold a fair and free international economic and trade order.
3. Article 3 of the Provisions also clearly reaffirms the Chinese government’s firm position of upholding multilateralism and will not change.
Rewin’s Insights
We believe that Chinese government's position of firmly protecting the legitimate rights and interests of various market entities will not change. If foreign entities do not commit illegal acts, there is no need to worry about this. This time, the Provisions issued by the Chinese government is to aim at providing a more stable, fair and predictable business environment for those foreign businesses who abide by the laws and regulations in China and eliminating the interference of illegal activities. China will, as always, welcome foreign investors to invest and do business in China, so that vast foreign investors are willing to come, stay and develop well, and China will always be a hot place for foreign investment.
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