Law and Compliance in China

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Business Contract

General Observation
You must specifically define the obligations of each party.
Law Applicable to the Contract
Law on contracts
Advisable Incoterms
Preferably an FOB or CIF incoterm should be chosen.
Language of Domestic Contract
The contracts can be written in English and Chinese. But in the event of conflict, Chinese contract will prevail, it is thus necessary to pay great attention to the translation.
Other Laws Which Can Be Used in Domestic Contracts
Possible, if the two parties agree.

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Legal Framework of Business

Equity of Judgments

Independence of Justice
Judiciary is not independent in China. The government controls the judiciary. The CCP directs verdicts and sentences, particularly in politically sensitive cases. China has not accepted the obligatory jurisdiction of the International Court of Justice (CIJ).
Equal Treatment of Nationals and Foreigners
The judiciary does not guarantee an impartial trial to a foreign national. A high degree of corruption exists in the country, especially corruption within the CCP is rampant.
The Language of Justice
Recourse to an Interpreter
Legal Similarities
The legal system is based on the Confucian philosophy of the social order by moral education. After the 1911 revolution, the Republic of China mainly adopted a legal code of Western type inspired by the German law.
The establishment of the People's Republic of China in 1949 brought a Soviet system influenced by socialism. There does not exist a tradition of constructive law in China and the first civil code dates from the beginning of the year 1980 and is written in a rather incomplete way as compared to the Western laws, which till today leaves an important place for arbitrary judgments. The law is subject currently to a progressive reform encouraged by external and internal pressures.. The constitution in force currently was promulgated in December 1982.

The Different Legal Codes

Base of the state, right of individuals, private property returned in constitution in 2004 Consitution of 1982
Regulations on the litigations on environmental protection, taxation and customs, the quality of products, against administrative decisions. Administrative Law and Administrative procedure law
Civil law (Property law and the general law of registered trademark) Civil law, Civil law procedure,
Criminal law.  Criminal law and Criminal procedure law
Labour law Labour law
Commercial law Law on contracts, Law on prices, Law on international commercial exchanges, Law of protection of consumers, Law against unfair competition
Company law Law on the partnership of companies, Law on industrial companies, Law on venture capital foreign companies, Law on WFOE,
Checking National Laws Online
China Legislative Network system
Other Useful Resources
China Law Blog, research guide to the Laws of China

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The Jurisdictions

Supreme Court
Highest Court in the legal system of China. Hong Kong and Macao are out of the jurisdiction of supreme people's court.
the Supreme people's court
"Intermediate people's court";
"Courts of the basic people"
The trial courts are responsible for criminal and civil cases.
Special Courts Military court, Court of railway transport and Maritime Court of China.
People's procuratorates They exert their authority in cases endangering the safety of the State and public safety, damaging the economic order and violating the personal and democratic rights of the citizens and other important criminal causes.

Court Officials

The judge
The Judge exerts the legal authority of the Government according to the law, he must judge a case according to the law.
The judges are also cross-examiners who examine the witnesses.
Differing from traditional courts, only evidence presented in the court is considered.
The prosecutor
Law minister
Justice and prison administration, governs the lawyer's profession and supervises the examinations of admission to the law profession.
The lawyer has an advisory role towards his client and must defend him.
Ministry of public safety
It is the authority of the police force. The police is responsible for maintenance of law and order, conduct investigations and arrest suspects in criminal cases.
May intervene in settling disagreements between private individuals.
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