After due lawful processes, Amendment (XI) to the Criminal Law of the People's Republic of China has now gone public. Shanghai Dongjin finds some relevant articles about business and operation of enterprise that is now listing below:

Whoever issues stocks, corporate or enterprise bonds, depositary receipts or other securities determined by the State Council in accordance with the law by concealing any material fact or making any major falsification in the share offer prospectus, share subscription form or corporate or enterprise bond offer prospectus or other offering documents shall, if the amount involved is especially huge, the consequences are especially serious or there are other especially serious circumstances, be sentenced to imprisonment of not less than five years and a fine. Any controlling shareholder or actual controller who organizes or instigates the commission of any conduct set forth in the preceding paragraph could also be sentenced.

Where a company or an enterprise with the obligation of information disclosure in accordance with the law fails to disclose other important information that shall be disclosed according to applicable laws, which seriously damages the interests of shareholders or any other person, or there are other serious circumstances, the maximum limitation of the imprisonment for the directly liable executive in charge and other directly liable persons would be adjusted to five years.

Where any employee of a company, an enterprise or any other entity, by taking advantage of his or her position, seeks or illegally accepts the money or property of any other person so as to seek benefits for such a person, if the amount involved is relatively large, the employee shall be sentenced to imprisonment of not more than three years or limited incarceration, and a fine; or if the amount involved is huge or there are other serious circumstances, the employee shall be sentenced to imprisonment of not less than three years nor more than ten years, and a fine; or if the amount involved is especially huge or there are other especially serious circumstances, be sentenced to imprisonment of not less than ten years or life imprisonment, and a fine.

Whoever, by means of deception, obtains loans, acceptance of bills, letters of credit, or letters of guarantee, among others, from a bank or any other financial institution, causing heavy losses to the bank or financial institution, shall be sentenced to imprisonment of not more than three years or limited incarceration, and a fine, or be sentenced to a fine only; or if it causes especially heavy losses to the bank or financial institution or there other especially serious circumstances, shall be sentenced to imprisonment of not less than three years nor more than seven years, and a fine.

Whoever absorbs public savings illegally or in disguised form, which disrupts the financial order, if the amount involved is especially huge or there are other especially serious circumstances, shall be sentenced to imprisonment of not less than ten years and a fine. But if the illegally obtained money is voluntarily returned or any compensation is made to reduce the occurrence of losses before being prosecuted, a lighter or mitigated punishment may be given.

Whoever manipulates the securities or futures market so as to affect securities or futures trading price or securities or futures trading volume shall, if the circumstances are especially serious, be sentenced to imprisonment of not less than five years nor more than ten years and a fine.

There are many crimes in the chapter for intellectual infringement that the maximum periods of the imprisonment are altered to ten years, such as when using the same trademark on the same goods and services without the permission of the owner of the registered trademark or selling goods while knowing the counterfeiting of registered trademarks.

Another main change in this amendment is that, the limited amount of fines are officially cancelled, which means it would be uncertain for the compliant amount of fines, and from now on courts would have more discretionary power on how much the fine shall be depending on the circumstances of the case.

If you want to read the complete article, you can refer to the below link (in Chinese only): http://www.shanghaiinvest.com/cn/viewfile.php?id=15647

If you have any question, please contact me. 

Mr. Mike Chang (Partner)

TEL: 0086-21-68868321

Email: mikechang@shanghaiinvest.com