Meeting with Legislative Affairs Commission of the NPC Standing Committee and SCOFCOM on the Draft Foreign Investment Law

2019-02-22 | All chapters

On February 22, 2019, the Legislative Affairs Committee of the Standing Committee of the National People's Congress and the Shanghai Municipal Commission of Commerce hosted a symposium to solicit opinions on the draft Foreign Investment Law. Representative of the European Chamber's Legal & Competition Working Group attended the symposium and presented members’ feedback and concerns.

The European Chamber appreciates the Draft’s aim of streamlining existing legislation by unifying into a single law the three current legal foundations that govern foreign investment. It also recognises the Draft’s attempt to address some of the biggest challenges faced by foreign businesses, such as unfair technology transfers, intellectual property rights (IPR) protection and equal opportunities in public procurement. However, the Chamber fundamentally disagrees that a legal distinction should be maintained between foreign and local companies, unless it is to provide exceptions for legitimate reasons such as specific national security concerns. Furthermore, the broad terms and vague language used throughout the Draft require clarification, as many of its articles read more like policy commitments than binding legal clauses, which leaves room for discretionary implementation of the law.