China Regulatory Brief: New Shanghai FTZ Clearance System & Negative Lists for Chengdu’s Pilot Areas

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Shanghai FTZ Implements On-Site Examination and Clearance System

On August 5, the Shanghai Entry-Exit Inspection and Quarantine Bureau (Shanghai CIQ) announced that an “on-site examination and clearance system” will be launched in the Shanghai Free Trade Zone (FTZ). To be implemented at eight quarantine inspection centers such as the Airport Comprehensive Bonded Zone, Yangshan Bonded Port Zone and Waigaoqiao Bonded Zone, the system will cover close to 10 kinds of imported goods including clothes, toys, jewelry and small appliances. An online platform enabling the public to view related inspection information will be established soon, said an official of the Shanghai CIQ.

Chengdu Adopts a Negative List Approach to Foreign Investment

Three pilot areas of Chengdu (i.e., Chengdu High-tech Industrial Development Zone, Longquanyi District and Tianfu New District) recently released the details of their respective negative lists governing foreign investment into the city.

Along with the promulgation of its negative list, the Chengdu High-tech Zone also issued a “supervision list” and “permission list” to further clarify the corporate establishment procedure and encouraged industries within the zone. The high-tech zone’s complete negative list can be found here (Chinese). The “Negative List for Foreign Investment (2014)” into the Longquan District covers 38 foreign-invested areas with 128 management measures. The Shanghai FTZ was the first jurisdiction to implement a negative list in China, followed by Pingtan, Fujian.

China-Netherlands DTA Took Effect on August 1

On August 1, the State Administration of Taxation (SAT) officially announced that the “Sino-Dutch Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (DTA)” would take effect on August 1, 2014. The China-Netherlands DTA was signed on May 31, 2013 in Beijing, covering individual income tax (IIT) and corporate income tax (CIT) in China and income tax, wage tax, dividends tax and company tax in the Netherlands. The complete version of the DTA can be found here.

China Launches Antitrust Investigation of Microsoft

China’s State Administration for Industry and Commerce (SAIC), the Ministry of Commerce (MOFCOM) and the National Department and Reform Commission (NDRC) jointly launched an antitrust investigation of the company, claiming that Microsoft did not disclose enough product information for two of its flagship products, the Windows operating system (OS) and Office software suite. In July, about 100 SAIC inspectors visited Microsoft’s office in Beijing, Shanghai, Guangzhou and Chengdu, investigating the company’s executives (including a vice-president) in China and confiscating some of the company’s internal documents. Several other foreign technology and auto companies, such as Mercedes-Benz and Audi, have also been investigated for antitrust issues in China.

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