CNS: It was mentioned that that the Measures for the Handling of Complaints from Foreign-invested Enterprises is a key move to enforce the Foreign Investment Law and its implementing rules. How does the Measures meet the requirements of the Foreign Investment Law and its implementing rules? Thank you.
Jiang Chenghua: To implement the CPC Central’s decisions and plans to expand opening up and promote foreign investment, on March 15th, the 2nd Session of the 13th National People’s Congress voted through the Foreign Investment Law with an overwhelming majority, which replaced the three foreign investment laws as the new basic law for foreign investment. Last December, the State Council considered and passed the Regulation for Implementing the Foreign Investment Law of the People's Republic of China, further operationalizing the legal framework established by the Foreign Investment Law.
To actively promote foreign investment and strengthen the protection of foreign investors’ lawful rights is the biggest highlight of the Law and the Regulation, which strengthen the legal framework for investment protection on two levels.
First, they provide for the substantive rights enjoyed by foreign investors and foreign-invested enterprises. The Law and the Regulation reinforce the legal institution of fair play for domestic and foreign-invested companies. The latter are equally entitled to state policies supporting business development and participate in standard-setting processes and government procurement activities. In terms of requisition compensation, it is expressly provided that compensations shall be paid based on the market value of requisitioned investment. As regards intellectual property protection, they toughen up punishment of infringement, prohibit administrative agencies from forcing technology transfer through administrative means, and step up protection for trade secrets. To address legacy issues, it is prescribed that local governments shall bear the obligation of honoring commitments and in case of policy commitments and contractual agreements having to be modified for the sake of national and public interests, pay fair and reasonable compensations.
Second, they improve the access to remedies of foreign investors and FIEs protecting their lawful rights and interests. To push for the resolution of disputes between foreign investors and FIEs and administrative agencies, aside from existing remedy channels such as administrative review and litigation, the Law specially provides for an FIE complaint handling regime to promptly address issues reported by foreign investors and foreign-invested enterprises and coordinate for the improvement of related policy measures. This is the first time that China sets up a regime for FIE compliant handling at the level of basic law. The Regulation provides further detailed rules on the scope of FIE complaint handling, improvement of the working mechanism and rules for central and local complaint handling, and FIE rights protection in the course of complaint handling.
When the Foreign Investment Law was published last year, there were concerns that enforcement would be difficult because the law provides generally the principles. The aim of the Rules on Handling Complaints of FIEs is a response to such concerns. Specific rules have been laid down to ensure that the Foreign Investment Law and the relevant Implementation Regulation can truly protect foreign investment. We believe that the Rules will reinforce the institutional guarantee for handling FIEs’ complaints and protect their legitimate rights and interests. Thank you!
CNR: The Rules improve the relevant working mechanism and further step up protection of foreign investors’ legitimate rights and interests. What will be done to ensure the requirements of the Rules are implemented?
Zong Changqing: In a global context where the COVID-19 pandemic continues to spread around the world, unilateralism and protectionism are on the rise, and globalization runs up against headwinds, the announcement and implementation of the Rules is of great significance in that it is not only an important measure to implement the arrangement of the CPC Central Committee and the State Council for stabilizing the expectations and confidence in foreign investment, but also a major declaration of China increasing the protection of the legitimate rights and interests of foreign investment, optimizing the business environment, and opening up still wider over the long term. We will implement the Rules in the following four areas.
First, we will do a good job of publicizing and interpreting the Rules. Today, we issued the Chinese and English versions of the Rules and held a press conference to explain the background, main contents and relevant arrangement of the document. At the same time, we will also actively mobilize provincial departments of commerce and complaint handling agencies to step up efforts to publicize and interpret the Rules through a variety of ways and channels, so as to enhance the publicity of the working mechanism related to foreign complaints handling and effectively help FIEs to solve problems and disputes through the relevant mechanisms and systems in a timely manner to protect their legitimate interests.
Second, we will improve the national complaint handling network. The National Center for Complaints of Foreign-Invested Enterprises will formulate guidelines to further clarify the procedure of complaints acceptance and refine the relevant work requirements so as to ensure the smooth implementation of the Rules on October 1. At the same time, we will, in accordance with the relevant provisions on the different levels of agencies handling complaints, publish as soon as possible the National Center for Complaints of Foreign-Invested Enterprises as well as local Agencies Handling Complaints, procedures, and the work rules and channels, so as to make it easier for complainants to reflect their problems to their local Agencies Handling Complaints in a timely manner. We will bring forward the formation of an efficient and convenient complaint work network with responsibility at different levels.
Third, training and exchanges on complaint work have been strengthened. Multi-tiered special training sessions on handling foreign investment complaints will be held in various ways to explain the Rules to local Agencies Handling Complaints, thus raising the level of professionalism of local staff. A system for complaint reporting will be established to summarize nationwide information on complaints regularly; good experiences and practices in handling complaints at the local and departmental levels are summarized and scaled up in a timely manner so as to continuously improve the level of complaint work.
Fourth, we will do more to guide and supervise the handling of complaints. MOFCOM will work with other relevant departments under the State Council to set up an inter-ministerial joint meeting mechanism to handle complaints of foreign-invested enterprises (FIEs). The joint meeting will coordinate and facilitate the handling of FIEs’ complaints at the central government level, and guide and supervise the handling of complaints at the sub-national level. We will put in place a regular supervision and inspection system, and circulate the complaint records to people's governments of provinces, autonomous regions and municipalities. With these efforts, we will ensure that the complaints handling mechanism plays its due role in protecting the legitimate rights and interests of foreign investors and optimizing their investment environment. Thank you.
China Daily: How will the National Center for Complaints of Foreign-Invested Enterprises (hereinafter referred to as the National Center) play its role after the publication of the rules?
Li Yong: According to the Foreign Investment Law (FIL), its implementation regulations and the Rules on Handling Complaints of Foreign-Invested Enterprises that has just been published, the National Center is set up at MOFCOM’s Investment Promotion Agency. Strengthening our function of handling FIEs’ complaints is key in our coordination with MOFCOM to stabilize foreign investment. It is also a step taken to enforce the investment protection system set out in the FIL and to improve governance efficacy.
Director-General Zong from the Department of Foreign Investment Administration just briefed us on the background to and the main content of the rules, including the revised terms of reference of the National Center, which gives it a clearer positioning. The National Center now has four main functions: accepting FIEs’ complaints in China, preventing complaints, administration of complaints handling and reporting policy advice. To be specific, the functions are as follows:
First, the National Center will accept foreign investors’ complaints in strict accordance with laws and regulations. The rules set out a series of provisions regarding the scope of acceptable complaints, the coordinated handling of complaints and the administration of the handling, among others. Going forward, we will strive to make our team more professional, act in strict accordance with the rules, make our work more transparent, and formulate and publish the center’s guide in a timely manner, so that we can handle foreign investors’ complaints effectively in accordance with laws and regulations.
Second, we will set store by risks in the business environment and do a good job in preventing complaints. Under the guidance of the office of the inter-ministerial joint meeting, the National Center will publicize laws, regulations and policies related to foreign investment, organize nationwide training programs on handling FIEs’ complaints, promote wider use of best practices in handling complaints, make policy recommendations in light of actual conditions and urge localities to handle complaints well to prevent investment disputes.
Third, the Center will continue to regulate complaint management, and enhance guidance and oversight of local departments for foreign investors’ complaints. Firstly, the Center will improve the management of archived foreign investors’ complaints at the Center. Specially, the Center will keep confidential the business secrets, confidential business information, and private information made known in the handling of complaints in accordance with law. Secondly, under the new rule, the Center will collect the reports of provincial complaint department submitted every two months, and transfer them to the office of the joint meeting. Thirdly, the Center will enhance guidance and oversight of local complaint departments. A routine supervision system will be set up to circulate reports of the handling of complaints, and make them public as appropriate.
Fourth, the Center will listen to all parties and entities, and submit policy recommendations in a timely manner. The Center will collect policy recommendations submitted by local authorities. On top of that, it will summarize typical cases, major problems, and policy recommendations put forward by FIEs and foreign investors, business associations, and local authorities, make recommendations on strengthening investment protection and optimizing the investment environment, and formulate documents of suggestions to protect the rights and interests of FIEs.
To sum up, the Investment Promotion Agency will actively enable the above roles of the Center to protect the lawful rights and interests of FIEs and foreign investors in accordance with laws and regulations, and to better safeguard the lawful rights and interests in foreign investors’ complaints, so as to continue improving the investment environment for foreign investors. Thank you.
Gao Feng: Due to the time limit, we will take one last question.
Economic Information Daily: Compared with the previous Interim Measures of MOFCOM on the Complaints of FIEs, what are the improvements and highlights in the revised Measures?
Jiang Chenghua: The Measures on the Complaints of FIEs is drafted based on the 2006 Interim Measures. Following the provisions of the Foreign investment Law and its implementation regulations, the Measures represents further enhancements to the complaint system. Four highlights can be spotted:
First, the scope of complaint subjects is wider. FIEs and foreign investors can file complaints to complaint agencies in two categories. The first is violation of their lawful rights and interests by administrative departments and their staff, which can be handled by requesting reconciliation from the complaint authorities, and the second is problems in the investment environment, which can be presented to the complaint agencies as suggestions for policy enhancements.
Second, the complaint mechanism is improved. At the central level, the Ministry of Commerce, in conjunction with other relevant departments under the State Council, establishes an inter-ministerial joint meeting system for complaints of foreign-invested enterprises to coordinate and facilitate the handling of complaints of foreign-invested enterprises. The Ministry of Commerce shall be responsible for handling the complaints where the matter is related to administrative actions of the relevant departments under the State Council, people's governments of provinces, autonomous regions and municipalities and their staff members, where the matter has significant national or international impact, and establishes the National Center for Complaints of Foreign-Invested Enterprises to handle such complaints. At the local level, local people's government at and above the county level shall designate a department or institution to be responsible for handling complaints. To facilitate the handling of complaints at local and central levels, these rules have detailed regulations on mechanisms on archive management, complaints records submission to Agency Handling Complaints at a higher level, regular supervision and inspection, and proposal on the protection of foreign-invested enterprises’ rights and interests.
Third, working rules for complaint handling is more clarified. To facilitate complaints filed by Complainants, these rules have clarified regulations on filing, acceptance, ways of handling, time limits, and dissatisfaction with the results of complaints. These rules request the Agency Handling Complaints to conduct sufficient communications with the Complainant and the Complainee, coordinate to handle complaints in ways corresponding to the specifics of complaints, and work for an appropriate solution for the complaint.
Fourth, the mechanism on the protection of rights and interests is more forceful. These rules underscore the protection of Complainants’ rights and interests. First, the filing of a Complainant is without prejudice to its rights to initiate administrative reconsideration and litigation. Second, the rights and interests of Complainants to participate in the handling process are guaranteed. The Complainant may also entrust others to file complaints and shall assist by providing documents, offering further explanations, or stating their opinions, and the Agency Handling Complaints shall coordinate to handle complaints in accordance with law, and work for an appropriate solution for the complaint. Third, Agencies Handling Complaints shall take effective measures in accordance with the law to protect trade secrets, confidential business information, and personal privacy of Complainants obtained during the complaint handling process. Fourth, no entity or individual may suppress or retaliate against Complainants who raise matters or apply for coordination to resolve matters through the complaint mechanism for foreign-invested enterprises.
These regulations have comprehensively upgraded the protection of the rights and interests of the Complainants. Thank you.
Gao Feng: Today’s press conference is concluded. Thanks go to the spokespersons and friends from the media. Thank you.
(All information published in this website is authentic in Chinese. English is provided for reference only. )