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Circular of the Supreme People's Court on the Promulgation of the Several Opinions on Providing Judicial Protection to Improve the Business Environment

From: 清华大学法学院《中国商事仲裁法律汇编》         Updated: 2017-08-07   

Fa Fa [2017] No.23

The high people's courts of all provinces, autonomous regions and municipalities directly under the Central Government, the Military Court of the People's Liberation Army and the Production and Construction Corps Branch of the High People's Court of the Xinjiang Uygur Autonomous Region,

We hereby promulgate the Several Opinions of the Supreme People's Court on Providing Judicial Protection to Improve the Business Environment for your conscientious implementation.

Several Opinions of the Supreme People's Court on Providing Judicial Protection to Improve the Business Environment

In order to improve the investment and market environment, create a stable, fair, transparent and predictable business environment, accelerate the construction of a new system for open economy and provide more powerful judicial services and protection, we have enacted Several Opinions of the Supreme People's Court on Providing Judicial Protection to Improve the Business Environment ("These Opinions") in the light of the actual trial and enforcement practice of people's courts. 

I. Equally protect various market players according to the law and encourage the perfection of the Socialist market economic entity legal system

1. Follow the principle of equal protection and fully safeguard the legitimate rights and interests of various market players. We shall fully carry out the work requirements for equally protecting the entities of different ownership, the market players in different regions and the interested parties in different sectors, follow the principles of the equal legal status, equal right protection and equal development opportunities of various market players, resolve various contradictions and disputes according to the law and promote the creation of an equal, orderly, dynamic and law-based business environment; rigorously implement the Opinions of the Supreme People's Court on Equally Protecting the Non-public Economy according to the Law and Promote the Healthy Development of the Non-public Economy and create a sound judicial environment for promoting the healthy development of the non-public economy.

2. Further perfect the system of rules governing legal persons in compliance with the provisions on legal entity system of the General Rules of the Civil Law of the People's Republic of China. We shall timely summarize the problems existing in the application process according to the changes in the legal entity system of the General Rules of the Civil Law of the People's Republic of China, resolve such problems based on different cases and encourage the further perfection of the socialist market economy legal entity system.

3. Strengthen the protection of medium and small shareholders and promote the optimization of corporate governance structure. We shall promulgate the relevant judicial interpretations of the company law in due time, properly handle dispute cases in connection with the effectiveness of corporate resolutions, the right to know of shareholders, profit distribution rights, the preemptive right and shareholder representative litigation etc., enhance the protection of shareholder's rights according to the law, promote standardized corporate governance, improve the international image of Chinese government protecting the rights and interests of medium and small shareholders and engender the enthusiasm for social investment. 

II. Accurately master market access standards and serve the construction of a new system for open economy

4. Achieve integration with the reform of the commercial system and promote the creation of a business atmosphere that is more conducive to mass entrepreneurship and innovation. We shall properly cope with the influence of the reform of the commercial registration system on the judicial trial work and vigorously facilitate the resolution of the issues concerning the application of laws after the reform of the subscribed capital registration system; employ big data and modern information technologies to actively promote the establishment of a national unified registration platform for all types of property rights and a financial transaction registration platform and consequently conduct more convenient and transparent market transactions.

5. Precisely grasp the foreign investment negative list system and promote the effective utilization of foreign investment. In the process of handling the dispute cases involving foreign-invested enterprises, we shall implement various measures for reforming the foreign investment management system according to the law, precisely grasp the changes in the content of the foreign investment negative list system and the negative list, properly address the issue concerning application of laws in respect of foreign investment access restrictions and shareholding restrictions arising from progressively loosening the restrictions on the foreign investment sectors and thus create a more open, fair and convenient investment environment.

6. Try various foreign commercial and maritime cases according to the law and serve and ensure the implementation of national major strategies (e.g. the Belt and Road initiative). We shall give full rein to the functions of trial, exercise the right of jurisdiction according to the law, fairly and efficiently try various foreign-related commercial and maritime cases and equally protect the procedural rights and substantive rights and interests of the parties concerned at home and abroad; render more international judicial assistance to countries along the Belt and Road, optimize relevant work mechanisms, timely resolve disputes and create a sound legal environment for the Belt and Road initiative in accordance with the Several Opinions of the Supreme People's Court on the Provision of Judicial Services and Safeguards by People's Courts for the Belt and Road Initiative.

7. Strengthen the civil and commercial trial work involving pilot free trade zones and provide judicial protection for the development of the new system for open economy. We shall implement the Opinions of the Supreme People's Court on Providing Judicial Protection for the Construction of the Pilot Free Trade Zones, actively render assistance to various reform measures such as governmental function transformation, opening up the investment sector, the changes in trade development modes and the opening up and innovation in the financial sector in pilot free trade zones, fairly and efficiently try various cases in relation to pilot free trade zones and ensure institutional innovation in the construction of pilot free trade zones according to the law; timely put forward judicial proposals for the issues concerning institutional flaws related to the market rules in pilot free trade zones identified in case trials and continue to promote the building of the legal system in pilot free trade zones. 

8. Propose legislation and amendments to legislation and enact and amend judicial interpretations in due time in an attempt to provide proper legal protection for foreign investment. We shall sort out and clear up judicial interpretations, policies and documents related to foreign investment and timely amend or repeal judicial interpretations, policies and documents in contravention of national basic policies and principles on opening to the outside world; with respect to the issues that can be resolved by enacting relevant laws and regulations, we shall timely proposal legislation and amendments to legislation; as to issues that can be resolved by promulgating judicial interpretations, we shall timely promulgate judicial interpretations.

III. Ensure fair market transactions and vigorously safeguard the legitimate rights and interests of market players

9. Increase efforts to protect property rights and lay a solid institutional foundation for creating a sound business environment. We shall rigorously implement the Opinions of the Central Committee of the Communist Party of China and the State Council on Improving the Property Right Protection System and Protecting Property Rights According to the Law and the Opinions of the Supreme People's Court on Giving Full Rein to the Functions of Trial and Vigorously Strengthening the Judicial Protection of Property Rights, optimize transaction rules of various markets, property handle property right protection cases and encourage the establishment and perfection of the property right protection legal systems; carry out further research into and rationally protect new types of rights, scientifically define the boundary of property right protection, properly mediate in and handle conflicts of rights, so that property rights are protected based on the rule of law.

10. Try various contract cases according to the law, respect contractual freedom and safeguard contractual justice. We shall respect and protect the autonomy of will of market players, rationally judge the effectiveness of various contracts with innovative transaction modes and structure, promote the decisive role of the market in resource allocation and enhance the vitality of the market-oriented economy; identify contractual nature, effectiveness, cancellation and rescinding and other situations as well as safeguard contractual justice in strict accordance with laws and judicial interpretations and provisions; proclaim lawful right exercise rules and the legal consequences occurred due to failure to discharge obligations to market players by way of case adjudication and guiding case publication in due time etc. and raise their awareness of contract, rules and responsibility; properly handle issue involving both civil and administrative law and issues involving both civil and criminal law, define the boundary of applicable laws, establish corresponding mechanisms and accurately grasp adjudication rules.

11. Properly try various financial cases and provide financial and judicial support for improving a business environment. We shall try cases of financial loans, guarantee, notes, securities, futures, insurance, trust and private lending according to the law, protect lawful transactions and balance the interests of the parties concerned; guide and regulation various financial activities by following the principle of serving the real economy; prudently review various innovative financial transaction modes and the effectiveness of contracts and accelerate the research into and promulgation of corresponding judicial interpretations and judicial policies; rigorously crack down on various financial violations and maintain financial order; strengthen the protection of financial consumers and effectively protect their legitimate rights and interests; enhance the building of professional financial trial organs and teams and continue to improve financial trial professionalism.

12. Rigorously try various intellectual property right cases according to the law, intensify efforts to protect intellectual property rights and enhance intellectual property right protection level. We shall rigorously implement the Outline of the Judicial Protection of Intellectual Property Rights in China (2016-2020) and continue to carry out the intellectual property right trial work; strengthen the research into legal issues related to the intellectual property right protection work in emerging sectors and business patterns, promulgate judicial interpretations and judicial policies in due time and promote the improvement in intellectual property right protection laws, regulations and systems; strengthen the building of intellectual property right court systems and fully leverage institutional advantages in specialized trial agencies, full-time trial personnel and professional trial work; further give rein to the judicial supervision function for intellectual property rights, carry out judicial review of administrative actions on intellectual property right granting and authentic right more widely and deeply, promote optimizing right effectiveness review mechanisms in intellectual property right litigations, rationally enhance the guiding function of civil actions in resolving disputes involving both civil and administrative law under special circumstances and promote the substantive resolution of administrative disputes over intellectual property right; comprehensively take civil, administrative and criminal actions to rigorously punish various intellectual property right violations and crimes and enable infringers to pay a corresponding price according to the law. 

13. Encourage the establishment of a unified and open socialist market system and promote orderly competition in the market. We shall regulate various monopolistic behaviors and unfair competition, properly handle cases in violation of market competition rules and give full play to the role of judicial adjudication in safeguarding and guiding a fair competitive market environment in strict accordance with the relevant competitive laws and regulations; further regulate administrative licensing and approval conduct carried out by the administrations, break up departmental monopoly and local protectionism by establishing and improving a jurisdiction system which properly separates from administrative divisions, facilitate the establishment of market regulatory pattern characterized by clarified rights and responsibilities, fairness and justice, transparency and efficiency and legal protection, and provide judicial protection for safeguarding a fair and orderly market competitive environment.

14. Strengthen the enforcement and fully guarantee the legitimate rights and interests of the wining party. We shall comprehensively establish a work pattern of comprehensive resolving the difficulties in enforcement, and perfect and implement the legal normative system, strengthen the building of information technology application systems, intensify the efforts of enforcement, regulate enforcement conduct, vigorously enhance the deterrent effects of enforcement and improve effectiveness of enforcement in compliance with the requirements of the Outline on Implementing the Work relating to "Taking Two to Three Years to Basically Resolve the Difficulties in Enforcement"; take actions against the personnel subject to the execution who refuse to execute the rulings and adjudications rendered by the people's courts according to the law and assist in executing the criminal liability of executors or guarantors.

IV. Strengthen the establishment of the bankruptcy systems and mechanisms and optimize the socialist market player remedy and exit mechanism

15. Optimize bankruptcy procedure initiation mechanism and bankrupt enterprise identification mechanism and effectively resolve the difficulties in filing the bankruptcy case. We shall timely accept bankruptcy cases that meet the requirement for filing a case and shall not impose additional requirements outside statutory requirements in accordance with the relevant provisions of laws and judicial interpretations; fully carry out the enforcement case referral bankruptcy review work and establish a sound work pattern characterized by carrying out enforcement of adjudications that can be executed and go into bankruptcy according to the law in the event of failing to carry out overall enforcement and meeting statutory bankruptcy requirements; actively explore to separate complicated procedures from simplified procedures depending on the difficulties in bankruptcy cases, facilitate the establishment of a rapid, simple and efficient trial mechanism and attempt to include some cases with clear facts, clear relationship of claims and liabilities or insolvent nature in the scope of rapid trials.

16. Promote the perfection of the bankruptcy reorganization and reconciliation system and promote the survival of worthwhile enterprises in difficulties. We shall guide all the parties subject to the bankruptcy procedures to fully have an acquaintance with the important function of the bankruptcy reorganization and reconciliation system in saving enterprises in difficulties; persist in carrying out the market-oriented bankruptcy reorganization work, attach more importance to business integration and asset restructuring and rigorously exercise mandatory approval rights according to the law with a view to cherishing the core value and fulfilling the institutional objectives of the reorganization system; actively promote the establishment of the mechanism for integrating the merger and reorganization outside the court and the bankruptcy procedures inside the court and strengthen the exploration and research into the pre-reorganization system; study to enact judicial interpretations related to the bankruptcy reorganization system.

17. Crack down on various debt dodges and effectively safeguard the legitimate rights and interests of market players. We shall rigorously crack down on malicious debt dodges, take actions such as affiliated enterprise merger bankruptcy and exercise of bankruptcy revocation or reclamation right in the bankruptcy procedures according to the law and search for and reclaim the property of debtors; impose more severe criminal penalties on crimes such as concealing and deliberately destroying accounting documents, accounting books and financial and accounting reports. 

18. Coordinate and perfect supporting bankruptcy systems and improve the level of rule of law in the bankruptcy procedures. We shall encourage the establishment special fund for bankruptcy expenses and provide expense support for the insolvency cases; incorporate the bankruptcy trial work into the overall building of the social credit system and impose more tough penalties on dishonest market players; promote the enactment of tax incentive laws and regulations in respect of bankrupt enterprise debt exemption and property disposal etc. and effectively reduce the tax burden on bankrupt enterprises; coordinate and resolve the credit repair issues of enterprises succeeding in reorganization and reconciliation and facilitate enterprises returning to the market; promote the unified coordination mechanism for the government and court interactive bankruptcy work and arrange for carrying out the work related to the business coordination, information provision and stability maintenance in the bankruptcy procedures; actively coordinate the utilization of financial rewards and subsidies or the establishment of special funds by the government and properly deal with the issues related to staff placement and safeguard for their rights and interests. 

19. Strengthen the building of professional bankruptcy trial organizations and bankruptcy administrator teams and promote the continuous improvement in the overall bankruptcy trial work level. We shall persevere in carrying out the bankruptcy trial court and room establishment and construction work and enhance the professionalism of bankruptcy trial organizations and personnel; research into and enact judicial interpretations related to bankruptcy administrators and accelerate the building of the professionalism improvement system for bankruptcy administrators; effectively optimize bankruptcy trial performance assessment and other relevant supporting mechanisms and improve the work efficiency for bankruptcy trials.

V. Promote the building of a social credit system and provide credit protection for continuous optimization of the business environment

20. Fully employ information technologies to promote the continuous optimization of the construction of the social credit system. We shall explore the in-depth roadmap for integrating the construction of the social credit system and the trial and enforcement work of people's courts, promote the establishment and optimization of the judicial big data collection, sharing and utilization mechanism in relation to the credit information of market players and intensify efforts to carry out the joint honesty reward and dishonesty punishment work. 

21. Seriously punish litigation frauds and promote the building of the litigation credit system. We shall hold criminally and legally accountable perpetrators who commit litigation frauds and fabricate evidence in strict accordance with the provisions of laws; promulgate relevant judicial interpretations and establish the standards for conviction and sentencing for litigation fraud crime in due time; optimize the mechanism for defining and controlling dishonesty litigation actions such as provision of false evidence and deliberate delay in burden of proof, and severely punish litigation dishonesty. 

22. Impose more severe penalties on the credit standing of the dishonest personnel subject to enforcement and promote the optimization of the dishonesty punishment mechanism. We shall continue to perfect the systems and standards for publishing the information on the list of the dishonest persons subject to enforcement and restricting the high consumption of the persons subject to enforcement, and severely punish the dishonesty of the persons subject to enforcement in compliance with the requirements of the Opinions on Accelerating the Promotion of the Construction of the Credit Supervision, Warning and Punishment Mechanism for the Persons Subject to Enforcement issued by the General Office of the CPC Central Committee and the General Office of the State Council; promote the optimization of the credit punishment macro-pattern of restricting dishonesty perpetrators everywhere provided that they commit dishonesty once, facilitate the building of the social credit system and excise long-term governance.

Source : https://www.globalchinalaw.com

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*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.