The Chinese Court adjudicated to accept the bankruptcy liquidation application filed by Cixi Gongniu Electric Appliance Co., Ltd. against Shanghai Gongniu Hongye Trading Co., Ltd. on February 28, 2025.   In accordance with Article 13 of the Enterprise Bankruptcy Law of the People’s Republic of China and Article 27 of the Supreme People's Court Provisions on the Designation of Administrators in Enterprise Bankruptcy Cases, this Court has designated a law firm as the administrator of Shanghai Gongniu Hongye Trading Co., Ltd. through the randomized selection mechanism administered by the Shanghai High People's Court.   Creditors of Shanghai Gongniu Hongye Trading Co., Ltd. shall declare their claims to the administrator prior to May 12, 2025. Creditors failing to declare claims within this period may supplement their declarations before the final distribution of bankruptcy assets; however, no supplementary distributions shall be made for prior completed allocations. The costs of reviewing supplementary claims shall be borne by the declarants. Failure to declare claims shall result in forfeiture of procedural rights under the Enterprise Bankruptcy Law. Debtors or asset holders of Shanghai Gongniu Hongye Trading Co., Ltd. shall discharge obligations or deliver assets to the administrator.   The First Creditors’ Meeting of Shanghai Gongniu Hongye Trading Co., Ltd. shall be convened at 14:00 on May 20, 2025,the Third Intermediate People’s Court of Shanghai Municipality. The meeting shall be conducted via online video conference. Creditors objecting to this format shall submit written objections with justifications to the administrator. Documentation Requirements for Creditors’ Meeting Attendance: 1. Legal entities or organizations: Valid business license, identity certificate of legal representative/principal (with official seal), and notarized power of attorney (original required if represented by agents); 2. Natural persons: Government-issued identification documents and notarized power of attorney (original required if represented by agents); 3. Legal representatives/agents: Practicing certificates (for attorneys) and official accreditation documents from affiliated institutions.   Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

China’s updated Company Law , effective July 1, 2024, introduces critical changes to corporate governance, requiring companies to revise their articles of association to ensure compliance. Below is a detailed analysis of the key amendments, their implications, and actionable steps for businesses. 1. Clarifying the Appointment and Removal of the Legal Representative Under Article 46 of the revised law, companies must explicitly define the procedures for appointing and replacing their legal representative. Previously, this role was typically assigned to the board chairman or a sole director. However, Article 10 now broadens eligibility, allowing the legal representative to be any director actively managing company operations or the manager. For companies with a board of directors, this shift introduces flexibility but also complexity. For instance, family-owned businesses that previously relied on professional managers as legal representatives may need to reconsider their approach to mitigate risks of mismanagement. Such companies could designate a trusted director instead, ensuring alignment with internal governance priorities. When revising the articles of association, it is essential to specify whether the legal representative is tied to a specific role (e.g., “the director overseeing daily operations”) or determined through shareholder or board resolutions. Clear removal procedures should also be outlined, such as requiring a majority board vote or a supermajority shareholder approval. For example, a clause might state: “The legal representative shall be designated by a two-thirds vote of the board and may be removed by shareholders holding 60% of voting rights.” 2. Implementing the Five-Year Capital Contribution Deadline A significant change under Article 47 mandates that shareholders of limited liability companies fully pay their subscribed capital within five years of incorporation. Existing companies (incorporated before July 1, 2024) are granted a three-year transition period (ending June 30, 2027) to adjust payment schedules exceeding this limit. Companies must audit existing shareholder agreements to identify deadlines extending beyond June 30, 2032. For example, if a shareholder’s payment is scheduled for December 2035, the deadline must be brought forward to June 2032. Shareholders unwilling or unable to meet these obligations should consider reducing registered capital, a process requiring filings with the State Administration for Market Regulation (SAMR) and creditor notifications. To mitigate risks, companies may impose penalties for delayed contributions, such as suspending voting rights or charging interest. Additionally, capital reduction processes should include public notices to creditors and safeguards to address potential disputes. 3. Accepting Equity and Debt as Capital Contributions Article 48 formally recognizes equity and debt as valid forms of capital contribution, provided they are appraisable, transferable, and legally compliant. Equity contributions must adhere to strict criteria under Judicial Interpretation III , including proof of ownership, absence of encumbrances, and third-party valuations. Debt contributions, particularly third-party claims, carry higher risks due to potential fraud. Companies should verify such debts rigorously—for instance, by sending confirmation letters to debtors and requiring notarized agreements. To protect against defaults, articles of association may restrict profit distributions to shareholders until debts are realized and include clawback clauses. A sample provision might state: “If a contributed debt is invalidated or uncollectible, the shareholder must compensate the company in cash within 30 days.” 4. Redefining Manager Authority The revised law (Article 74) eliminates statutory manager powers, leaving authority to be defined either through board delegation or the articles of association. Companies must decide whether to prioritize operational efficiency or checks and balances. For startups seeking agility, delegating authority to the board allows flexibility. Mature companies, however, may prefer specifying managerial powers in the articles, such as approving contracts up to a certain value without board oversight. Existing articles referencing outdated statutory powers (e.g., hiring mid-level staff) should be revised to align with the new framework. Conclusion The revised Company Law underscores the need for proactive governance adjustments. Companies should prioritize updating their articles of association to address legal representative procedures, capital contribution timelines, and non-monetary contributions. Engaging legal counsel to navigate SAMR filings and stakeholder communications is critical. Failure to comply risks penalties, operational disruptions, or invalidation of corporate actions. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

Explanation The Special Administrative Measures (Negative List) for Foreign Investment Access  (the “ Negative List for Foreign Investment Access ”) set out on a unified basis the requirements on equity requirements and senior executives and other special administrative measures for foreign investment access. Fields not covered by the Negative List for Foreign Investment Access  shall be subject to administration under the principle of equal treatment for domestic and foreign investments. Domestic and foreign investors shall uniformly apply the relevant provisions of the Negative List for Market Access . No overseas investor may engage in investment and business activities as individually owned business, an investor in a sole proprietorship enterprise, or a member of a farmers’ cooperative. Foreign-invested enterprises investing in China shall comply with relevant provisions of the Negative List for Foreign Investment Access . In the course of performance of duties pursuant to the law, the relevant authorities shall not process relevant matters including application for a permit, enterprise registration, etc. for proposed investments by overseas investors in fields mentioned in the Negative List for Foreign Investment Access  that does not comply with the provisions of the Negative List for Foreign Investment Access ; where approval for a fixed asset investment project is involved, the relevant approval matters shall not be processed. No foreign-invested partnership business may be established in any investment field subject to equity requirements. Upon review by the competent authorities of the State Council and approval by the State Council, the provisions of the Negative List for Foreign Investment Access  concerning a relevant field may not apply to specific foreign investment. Domestic enterprises engaged in businesses in fields prohibited from investment mentioned in the Negative List for Foreign Investment Access  shall be examined and approved by the relevant competent authorities of the state for issuing shares abroad and going public for trading. Overseas investors shall not participate in the operation and management of the enterprises, and their equity ratio shall be governed by reference to the relevant regulations on the management of domestic securities investment of overseas investors. Where domestic companies, enterprises, or natural persons merge or acquire with or acquire their affiliated domestic companies through a company legally established or controlled overseas thereby, the relevant provisions on foreign investment, overseas investment, foreign exchange administration, etc. shall apply. For administrative approval, eligibility requirements, national security, or other relevant measures concerning cultural, financial, or other fields not listed in the Negative List for Foreign Investment Access , existing regulations shall apply. Where the Mainland and Hong Kong Closer Economic Partnership Arrangement  and its subsequent agreements, the Mainland and Macau Closer Economic Partnership Arrangement  and its subsequent agreements, the Cross-Straits Economic Cooperation Framework Agreement  and its subsequent agreements, or the international treaties or agreements to which China accedes or is a signatory contain more preferential provisions on access treatment for overseas investors, the relevant provisions may apply. If more preferential opening-up measures are offered to eligible investors in special economic zones, such as pilot free trade zones, the relevant provisions shall apply. The Negative List for Foreign Investment   Access shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce in concert with the relevant authorities. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

In the ever-evolving landscape of Chinese commerce, ensuring the protection and longevity of your brand is paramount. This comprehensive guide unravels the intricacies of Chinese trademark registration, providing international businesses with invaluable insights for sustainable growth and success. Fortifying Long-Term Success: The Significance of Chinese Trademarks A Shield Against Infringement and Unlawful Use One of the primary motivations for registering a Chinese trademark is the robust shield it provides against counterfeiting and unauthorized use. Without a registered trademark in China, the vulnerability of your brand to replication and fraudulent sales increases significantly. Counterfeit products not only erode brand credibility but also result in substantial financial losses. By registering your trademark, you instill confidence in customers that they are purchasing an authentic product. This becomes especially crucial when dealing with trademark squatters who can register trademarks in China, posing a threat to legitimate brands. Registration empowers brands to counter such threats legally and protect their products from seizure based on trademark infringement. Not registering a trademark in China exposes brands to significant risks of brand erosion and loss of business, making the registration of a Chinese trademark imperative. Navigating E-commerce – Trademark Registration in China In the era of rapid digitalization, e-commerce has emerged as a key player in the business landscape. Registering a trademark in China is a prerequisite for companies looking to sell their products on e-commerce platforms. Major players in the Chinese online marketplace often require trademark registration as a mandatory step for listing products. This strategic move not only enhances brand visibility in the expansive digital market but also safeguards against unauthorized use of the brand name. Having a registered trademark allows companies to swiftly remove listings from Chinese e-commerce websites when products are sold under a different brand name, mitigating the risk of brand dilution and financial losses. Licensing Strategies for Product Distribution Under the legal framework of the China Trademark Law, companies planning to sell products in China under an existing brand name must own the trademark for that product. Without trademark ownership in China, companies face hurdles in licensing their products to distributors for selling. Reputed distributors often insist on the trademark being registered in China before entering into distribution agreements. In some cases, unscrupulous distributors may register the trademark on behalf of the company without their knowledge, leading to potential legal complications. Therefore, it is in the best interest of companies to register their trademark in China before licensing products to distributors. Pioneering Product Sales China stands as one of the largest global markets, making it a priority for many companies to tap into its vast potential. However, selling branded products in China without a registered trademark can expose companies to precarious situations. There is a high likelihood of another entity securing the trademark for the brand and subsequently suing the original brand for trademark infringement. To establish a strong and secure presence in the Chinese market, it is highly recommended for any brand to register its trademark in China, including the Chinese language equivalent. Navigating the Complexities of Trademark Registration in China The Trademark Registration Journey The journey of trademark registration in China involves meticulous planning and adherence to specific processes. Companies can choose to register their trademark through the China Trademark Office (CNIPA) or via the World Intellectual Property Organization (WIPO). Given China's first-to-file policy, where the first applicant is favored and awarded the trademark rights, early planning and application are essential. The chosen filing system—directly with CNIPA or through WIPO—holds significant implications for the flexibility and control that applicants have over their trademark application. Choosing the Right Filing System Understanding the two systems available for filing trademark applications in China is crucial for a successful registration process. Companies can opt for direct filing at CNIPA or submit an application through WIPO. Foreign companies and applicants without a residency or place of business in China must apply for trademark applications through a registered agent in China. Direct application with CNIPA offers greater flexibility and control for the applicant to decide on the classes, products, and services covered by the trademark. In contrast, filing through WIPO leaves the decision on subclasses to the examiner's discretion, limiting the applicant's control. Verifying Trademark Availability A thorough pre-filing search is a pivotal step in the trademark registration process. Conducted by the China Trademark Office, this search aims to check the availability of the desired trademark. The search, typically completed within a day, assists applicants in determining whether their chosen trademark is already registered by someone else. Trademarks are approved on a first-come, first-served basis in China, meaning that a prior registration will prevent subsequent applicants from securing the same trademark. Conducting a pre-filing search saves considerable effort and resources by identifying potential conflicts early in the process. Selecting the Right Product and Service Sub-Classes While China follows the International Classification under the Nice Agreement, it further divides these classes into smaller subclasses. Careful consideration and understanding of the relevant subclasses are crucial when filing for trademark registration. For instance, different subclasses exist for general footwear and boots in China. If not deemed similar, the same trademark can be registered by different companies in each subclass. Ensuring that the trademark covers all relevant products and services in each applicable subclass are vital steps for comprehensive protection. Translating the Trademark into Chinese Trademarks registered in Roman characters may not provide complete protection against similar Chinese trademarks. Registering a Chinese version of the trademark becomes essential to eliminate ambiguity and prevent misuse. However, the process of choosing a Chinese trademark involves considerations beyond direct translation. Cultural nuances, pronunciation, and potential meanings in different Chinese dialects play a crucial role. Brands can learn from examples like Ralph Lauren, whose brand was known as "San Jiao Ma" in China, translating to "three-legged horse." Choosing a Chinese trademark that aligns positively with cultural perceptions enhances brand resonance and mitigates the risk of unintended meanings. Submitting Essential Documents Companies undertaking the registration of a Chinese trademark must prepare and submit necessary documents as required by the National Intellectual Property Administration (CNIPA). Ensuring compliance with prescribed formats and verifying documents for accuracy and completeness is imperative before submission. The submission process marks a critical stage, and attention to detail during document preparation significantly contributes to the smooth progress of the application. Verification and Approval by CNIPA Upon submission, CNIPA rigorously verifies each document, ensuring adherence to specified requirements. Based on this verification, CNIPA may request additional documents to advance the trademark registration process. The verification phase, known for its lengthiness, typically spans at least a year. Successful navigation through this phase positions the application for the subsequent stages of approval and announcement. Approval and Issuance of Trademark Upon completing the verification process, CNIPA proceeds with the approval and public announcement of the trademark. The announcement period, lasting three months, invites legal objections to the trademark. Any party with legal grounds can raise objections during this window, underscoring the importance of a meticulously prepared application that anticipates potential challenges. Receiving the Trademark Certificate In the absence of objections during the announcement period, CNIPA issues the certificate of approval to the applicants. This marks the successful conclusion of the trademark registration process. While the timeline from application to approval can vary, applicants can reasonably expect to receive the Electronic Trademark Certificate within six months. Embark on a comprehensive journey through the intricacies of trademark registration in China. This guide serves as an invaluable resource, equipping international businesses with the knowledge needed to navigate the complex terrain of the Chinese market and establish a robust foundation for success. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

In the intricate landscape of international business, a profound understanding of the recognition and enforcement process for foreign arbitration awards in China is indispensable. This in-depth guide delves into the legal foundations, nuanced application procedures, and crucial considerations for a meticulous approach. I. Legal Basis for Recognition and Enforcement of Foreign Arbitration Awards China's Civil Procedure Law serves as the cornerstone for recognizing and enforcing foreign arbitration awards. The law explicitly outlines that parties must apply to the competent People's Court for recognition and enforcement. The court's evaluation is grounded in China's international treaties or the reciprocity principle. The New York Convention, adopted by China in 1986, amplifies the legal framework for recognizing foreign arbitral awards. II. Application Procedure Eligible Applicants: Any party involved in the foreign arbitration award, whether the prevailing or losing party, holds the right to apply for recognition and enforcement. The application is submitted directly to the Intermediate People's Court within the jurisdiction where the respondent resides or where their assets are situated. Competent Court: Jurisdiction over recognition and enforcement lies with the Intermediate People's Court in the jurisdiction of the respondent's residence or the location of their assets. Required Documentation: Applicants must compile a comprehensive set of documents, adhering to the provisions outlined in the Civil Procedure Law. This includes the arbitration award, the arbitration agreement, and any relevant contracts or evidence. Application Fees: In accordance with the Regulations on Payment of Litigation Fees, fees for applying for recognition and enforcement are calculated based on the amount involved in the case. III. Timeframe and Service Application Deadline: The clock for applications starts ticking from the second day after the foreign arbitration award becomes effective. Applicants must submit their requests for recognition and enforcement within a strict two-year timeframe. Domestic Service of Documents: Compliant with the Hague Service Convention, China prescribes various methods for effective document service, including central authority assistance, diplomatic channels, and consular delivery. Proper adherence to these procedures is vital for a legally sound recognition and enforcement process. IV. Documents Required Authorisation Documents (Notarised and Apostiled/legalized) and its translation; The opponent's information (Company profile); The Final Arbitration Award (Notarised and Apostiled/legalized) and its translation; The Contract containing an arbitration clause (Notarised and Apostiled/legalized) and its translation; Record of service of the Arbitration Award (Notarised and Apostiled/legalized) and its translation; and Other docs that required by the Court. V. Grounds for refusal of enforcement There was not an effective arbitration agreement; A party was not given proper notice of the appoint ment of the arbitrator or of the arbitration proceedings; The award was made beyond the terms of reference of the tribunal; The composition of the tribunal or the arbitral proce dure was not in accordance with the parties’ arbitration agreement or the laws where the arbitration took place; The award has not yet become binding on the parties, or has been set aside or suspended by a competent author ity of the country in which, or under the law of which, that award was made; The subject matter of the difference is not capable of settlement by arbitration under Chinese law; or The recognition or enforcement of the award would be contrary to the public policy of China. VI. Tactical Considerations Proactive Application: Recognizing the trend of arbitration becoming more prevalent in international commerce, winning parties are advised to take the initiative. Applying promptly for recognition and enforcement post-arbitration empowers the successful party, preventing the losing side from preemptively challenging the award's recognition. Legal Expertise: Given the intricacies involved, seeking legal counsel from experts in international arbitration and Chinese law is recommended. Tailored advice can address case-specific nuances and ensure a strategic and effective approach. This guide serves as a beacon, illuminating the path through the complexities of recognizing and enforcing foreign arbitration awards in China. Empowering legal professionals and businesses, it encourages a proactive stance in safeguarding international legal agreements. For specific cases and to navigate the subtleties of your unique situation, it is imperative to consult legal experts who specialize in Chinese law. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

As China‘s economy continues to grow and evolve, the legal landscape surrounding employment relationships has become increasingly complex. Ensuring compliance with labor laws and regulations is crucial for both employers and employees to protect their respective rights and interests. One of the fundamental aspects of this compliance is the drafting of comprehensive and legally sound employment contracts. In China, there are several key points to consider when drafting employment contracts: 1. Mandatory Clauses in Employment Contracts According to Article 17 of the Labor Contract Law, an employment contract should include nine mandatory clauses: (1) the name, address, and legal representative or principal person in charge of the employer; (2) the employee's name, address, and resident identification number or other valid identification document number; (3) the term of the employment contract; (4) the job description and workplace; (5) working hours and rest and leave entitlements; (6) labor remuneration; (7) social insurance; (8) labor protection, working conditions, and occupational hazard protection; and (9) other matters required by law and regulations to be included in the employment contract. While these nine clauses are essential, the absence of any of them does not necessarily invalidate the employment contract. However, the employer may be liable for damages caused to the employee if the contract does not include the mandatory clauses (Article 81). 2. Legally Stipulating Probation Periods Employers can agree on a probation period when initially signing an employment contract with an employee. The probation period should not exceed one month for contracts lasting between three months and one year, two months for contracts lasting between one and three years, and six months for fixed-term contracts of three years or more or open-ended contracts. Probation periods cannot be agreed upon multiple times with the same employee (Article 19) or for employment contracts lasting less than three months or task-based contracts (Article 39). If only a probation period is stipulated without specifying the employment term, the probation period is invalid, and the period is treated as the employment term (Article 39). Employers violating the probation period regulations shall be ordered to rectify the situation and compensate the employee based on their probation period salary for any excess period beyond the legal limit (Article 83). 3. Clearly Defining Conditions for Hiring After the Probation Period Employers should clearly define the conditions for hiring an employee after the probation period. Vague or abstract descriptions may make it difficult for the employer to prove that the employee did not meet the hiring criteria during the probation period, potentially leading to legal risks. Employers should quantify the hiring conditions as much as possible and publicize them to demonstrate that probationary employees are aware of the criteria. It is advisable for employers to obtain written acknowledgment from new hires confirming their understanding of the hiring conditions to mitigate potential disputes. 4. Exercising Caution When Stipulating Liquidated Damages Apart from training service periods (Article 22) and non-competition agreements (Article 23), the Labor Contract Law prohibits employers from stipulating liquidated damages to be paid by employees (Article 25). Employers should exercise caution when including liquidated damages clauses in employment contracts and ensure compliance with the relevant legal provisions. 5. Clearly Defining Compensation for Damages Caused by Employees According to the Interim Provisions on Wage Payment (Article 16), employers can deduct compensation for economic losses caused by employees from their wages, subject to the terms of the employment contract. However, the monthly deduction should not exceed 20% of the employee's monthly wage, and the remaining wage should not be lower than the local minimum wage standard. 6. Legally Stipulating Non-Competition Obligations According to Article 24 of the Labor Contract Law, non-competition obligations can be imposed on senior management personnel, senior technical personnel, and other employees subject to confidentiality obligations. The scope, geographic area, and duration of the non-competition obligation should be agreed upon by the employer and employee and should not violate laws and regulations. Employers should exercise caution when determining the scope of employees subject to non-competition obligations to avoid unnecessary economic burdens. Additionally, the amount, payment method, and timing of non-competition compensation should be clearly stipulated; otherwise, the non-competition agreement may be deemed ineffective. 7. Avoiding Illegal Clauses Employers cannot include clauses stipulating fines, requiring employees to provide guarantees or collateral, or allowing the confiscation of employee identification documents (Articles 84 and 25). 8. Clearly Specifying Employee Notification and Delivery Methods Employment contracts should clearly specify the employee's contact address and require the employee to acknowledge that they can receive documents sent to that address. Employers should also stipulate various delivery methods, such as email and physical address, to facilitate effective communication and management, especially in cases of employee disciplinary actions or absences. By considering these key points, employers in China can draft comprehensive and legally compliant employment contracts, mitigating potential risks and disputes. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

Welcome to our series on Chinese Advertising Law – your concise guide to navigating the regulatory landscape. For foreign brands entering the Chinese market, adherence to advertising regulations is not just a good idea; it's crucial. In this series, we'll explore real cases where businesses faced the consequences of not playing by the rules. Picture this: fines in the millions and, in extreme cases, the loss of a business license. Join us as we break down these cases in reader-friendly terms, providing a practical roadmap for foreign brands to stay on the right side of Chinese advertising law. Punishment for Publishing Advertisements Without Relevant Authorities' Approval Penalty: Confiscation of illegal gains: RMB 18,000; Fine: RMB 18,000 Violation: post a video promoting a medical device without scrutiny by the advertising review authority. Case Description: This case involves a well-known company, through the account on the Xiaohongshu (Little Red Book) platform, posted a video note titled "I've Had Enough of Hairy Days! Save Me, Hair Removal Device!" promoting a medical device, the U106PR model of an Intense Pulsed Light (IPL) treatment device. This advertisement, costing RMB 18,000, was not subjected to scrutiny by the advertising review authority. Relevant Legal Provisions Advertising Law of the People's Republic of China Article 46: The release of advertisements for medical care, pharmaceuticals, medical devices, pesticides, veterinary drugs and health food products, as well as other advertisements that shall be reviewed as stipulated by laws and administrative regulations, shall be reviewed by relevant departments (hereinafter referred to as advertising review authorities) for the contents thereof prior to the release; no release is allowed if they are not reviewed. Article 58: Where any of the following acts is committed, the market supervision and administration department shall order the advertiser to cease publishing the advertisement and eliminate the impact within the corresponding scope, confiscate one to three times the advertising costs, and may concurrently impose a fine of RMB 100,000 to RMB 200,000 if the advertising costs are incalculable or apparently low; or where the circumstances are serious, confiscate three to five times the advertising costs, and may concurrently impose a fine of RMB 200,000 to RMB 1 million if the advertising costs are incalculable or apparently low, and may revoke the business license; and the advertising review authority shall revoke the approval document for advertisement review and shall not accept an application for advertisement review submitted by the advertiser for one year: ... (14) Publishing an advertisement without review in violation of Article 46 of this Law Lawyer's Commentary In Chinese advertising regulation, the definition of advertisements is broad, covering not only explicit types but also implicit ones like knowledge sharing, and product recommendations by users/consumers. If an advertisement (including implicit advertisements) involves medical, pharmaceutical, medical equipment, pesticides, veterinary drugs, or health food products, it must undergo review by the relevant authority before publication, as per Article 46 of the Advertising Law. This regulation aims to protect the public from misleading and inaccurate advertising information. Advertisers should identify the nature of the promoted product and submit it for review before publication. Legal consequences for non-compliance with advertising regulations are severe. For serious violators, measures like revoking licenses and rejecting advertising review applications can be imposed. Hence, it is crucial to conduct thorough legal compliance checks before publishing any advertisement. Foreign brands and advertisers should take note of the expansive definition of advertising, which includes not only overt promotions but also subtle forms such as product recommendations by users/consumers, etc. The case highlights the importance of a proactive approach in seeking approval for advertisements involving medical care, pharmaceuticals, medical devices, pesticides, veterinary drugs and health food products. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.

Welcome to our series on Chinese Advertising Law – your concise guide to navigating the regulatory landscape. For foreign brands entering the Chinese market, adherence to advertising regulations is not just a good idea; it's crucial. In this series, we'll explore real cases where businesses faced the consequences of not playing by the rules. Picture this: fines in the millions and, in extreme cases, the loss of a business license. Join us as we break down these cases in reader-friendly terms, providing a practical roadmap for foreign brands to stay on the right side of Chinese advertising law. False Advertising on Chinese E-commerce Platforms Penalty: RMB 50,000 Violation: Issued for deceptive advertising on the E-commerce platform, promoting misleading claims about the products. Case Description: This case involves an individual operating a store on the E-commerce platform, focusing on the sale of everyday products such as "Five-Black Sesame Pills." Apart from selling these items, the individual utilized the store's webpage for promotional activities. The webpage featured misleading advertisements, including statements like "Good for kidneys”, etc. Notably, these advertising claims were directly copied from online sources without any factual basis. This not only raises concerns about the authenticity of the products but also poses a significant risk of misleading consumers. The dissemination of such deceptive content is a clear violation of Chinese advertising regulations. Relevant Legal Provisions Advertising Law of the People's Republic of China Article 4: Advertisements must not contain false or misleading content, and advertisers are prohibited from deceiving or misleading consumers. Advertisers are responsible for the authenticity of the content in their advertisements. Article 55: Violation of the provisions of this law by publishing false advertisements shall result in the market supervision and management department ordering the cessation of advertisement publication. Advertisers will be instructed to eliminate the impact within the corresponding scope and may face fines ranging from three to five times the advertising expenses. If the advertising expenses cannot be calculated or are significantly underestimated, fines may range from twenty thousand to one hundred thousand RMB. For those with three or more violations within two years or having other serious circumstances, fines may range from five to ten times the advertising expenses. If the advertising expenses cannot be calculated or are significantly underestimated, fines may range from one hundred thousand to two hundred thousand RMB. Additionally, the business license may be revoked, and the advertising examination authority shall revoke the advertising examination approval document. No advertising examination applications will be accepted within one year. Commentary This case involves a penalty of RMB 50,000 imposed on an individual operating a store on the platform, selling ordinary food products. The misleading advertisements on the store's webpage, including claims such as "Good for kidneys", etc. were copied from the internet without any factual basis. These deceptive practices have the potential to mislead consumers, constituting a violation of Chinese advertising regulations. The product pages of online shopping typically include factors closely related to the product itself, such as ingredients, performance, usage, quality, place of origin, producer, and expiration date. In an effort to boost product visibility and capture attention, some e-commerce operators often stack multiple keywords in product titles or exaggerate product descriptions. However, for some merchants, the keywords used may not align with the actual product, lacking factual basis and potentially constituting false advertising. Even for products with certain socially recognized efficacy, during inspections by regulatory authorities, product operators/advertisers may be unable to provide objective proof for the content of their advertisements, such as inspection reports, laboratory reports, or awards. In such cases, the advertising may also be deemed as false advertising. This case highlights the importance of adhering to truth in advertising, not only to avoid legal consequences but also to build trust with consumers. Businesses should ensure that their advertisements are factually accurate and do not engage in deceptive practices, as the repercussions extend beyond financial penalties to potential revocation of business licenses. As foreign businesses navigate the Chinese market, understanding and complying with advertising laws is essential for establishing a positive brand image and avoiding legal pitfalls. The case serves as a cautionary tale, urging businesses to prioritize truthfulness in their advertising endeavors on Chinese platforms. Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.