China Monthly TMC Update – January 2017

Social media platforms face strict requirements for distributing audio-visual programs

The State Administration of Press, Publication, Radio, Film and Television (“SAPPRFT”) issued a circular (“Circular”) on 16 December 2016 to further regulate the distribution of audio-visual programs through social media platforms such as Weibo and WeChat.

According to the Circular, an organisation that holds an Internet Audio-Visual Program Service Permit (“AVSP”) must operate within the specific business scope permitted when distributing audio-visual programs through social media platforms. If an organisation does not hold an AVSP but still distributes audio-visual programs through a social media platform, the platform will be deemed to be the operator of the relevant audio-visual program services and be responsible for examining and controlling the distributed content. In addition, if an audio-visual program exceeds the permitted business scope set out in the AVSP, its distribution through the platform shall be prohibited.

The Circular also requires that no audio-visual program concerning current politics that is produced by non-licensed network users can be distributed through social media platforms.

China publishes the Draft E-commerce Law

China published the Draft E-commerce Law (“Draft”) on 27 December 2016 to solicit public opinions. The Draft applies to e-commerce activities that occur within the territory of China or e-commerce activities involving the participation of operators or customers who are within the territory of China.

The Draft sets out regulatory and compliance requirements concerning various aspects of e-commerce, including operation activities and responsibilities of 3rd party e-commerce operators and other e-commerce operators, supply of supporting and facilitating services (e.g. electronic payment services and express delivery services), protection of customer interests (e.g. quality warranties, IP right protections, and use of personal data), and encouragement of cross-border e-commerce.

The period for public comments will end on 26 January 2017. The final version is expected to be published within 2017. Please click here to read a Law-Now about the Draft.

China publishes the National Security Strategy in Cyberspace

The Cyberspace Administration of China published the National Security Strategy in Cyberspace (“Strategy”) on 27 December 2016. For the purpose of establishing a peaceable, secure, open, cooperative and regulated cyberspace, the Strategy sets out four general principles: respecting the cyber sovereignty of each country, using cyberspace in a peaceable way, regulating cyberspace by law, and making arrangements for cyber security and development.

Among others, protecting critical information infrastructure (“CII”) is identified as one of the main tasks. In particular, the Strategy lists several examples of CII to illustrate the definition of CII provided in the PRC Cybersecurity Law, including basic information networks used to provide public communication services and radio/TV broadcasting services; important information systems in the areas of energy, finance, traffic, education, science and research, water conservation, industrial manufacture, medical and health, social security, and public services; important information systems used by national departments; and important internet application systems.

In addition, expediting the use of secure and reliable software, establishing big data regulatory rules, supporting cloud service development, formulating cybersecurity standards, strengthening evaluations of cyber products and services, and increasing international cooperation are also listed as part of the key tasks.

Please click here to read the full text (Chinese only) of the Strategy.

MIIT publishes new rules to regulate telecom service agreements

The Ministry of Industry and Information Technology (“MIIT”) published a circular (“Circular”) on 28 December 2016 to regulate the agreements between telecom service operators and users.

The Circular lists the items that must be included in telecom service agreements, including identification and contact information of the parties, description of the services, price, service warranty, complaint channel, breach liability, dispute resolution, execution data and validity period. The Circular also identifies the items that must not be included in an agreement, such as those exempting or limiting the operator’s contractual or tortious liability, limiting the user’s right to choose other service operators, or exempting the operator’s obligation to notify the user upon emergencies that are detrimental to the user’s interests.

According to the Circular, a telecom service operator shall not refuse to enter into service agreements with users without legitimate reasons. All the service warranties that an operator makes through public media shall automatically be included in the relevant service agreements, unless it is unfair to users, or damages users’ legal interests.

In particular to internet access services, the Circular requires that all service agreements must be in written form (including electronic writing),and an operator must obtain authentic identification information of a user before they enter into any service agreements.

Please click here to read the full text (Chinese only) of the Circular.

MIIT publishes guidance on industrial robots

MIIT published the Standard Conditions for the Industrial Robot Industry (“Standard Conditions”) on 29 December 2016, to guide the development of both industrial robot manufacturing enterprises and enterprises focusing on the integration and application of industrial robots (“Robot Enterprises”).

The Standard Conditions set out recommended requirements for Robot Enterprises concerning their general qualifications, quality controls, R&D capabilities, employees, sales of products and after-sale services. The requirements are not mandatory.

Robot Enterprises are encouraged to participate in MIIT’s voluntary certification system established in accordance with the Standard Conditions. While the specific certification procedures and mechanisms are still being formulated, the Standard Conditions specify that MIIT will periodically publish lists of Robot Enterprises that satisfy all the recommended requirements. It is possible that the listed Robot Enterprises might enjoy certain beneficial treatments.

Please click here to read the full text (Chinese only) of the Standard Conditions.

CBRC approves the first independent direct bank

The China Banking Regulatory Commission approved on 5 January 2017, the establishment of Baixin Bank Co., Ltd., which has joint investment from China CITIC Bank and Baidu, to operate direct banking services. This is the first time that an independent entity has been approved to operate direct banking services in China. Before the establishment of Baixin Bank, direct banking services were operated entirely by the branches or departments of commercial banks.

Baixin Bank will not open any physical branches. Instead, it will operate through the internet, telephone, ATM, and mobile channels. It is expected to combine China CITIC Bank’s advantages in network, risk control and product development with Baidu's strength in internet technologies and traffic volume, and to offer more convenient services to users and provide more creative financial products.

SAIC publishes seven-day return policies for online shopping

The State Administration for Industry and Commerce (“SAIC”) published the Tentative Measures for the Return of Goods Purchased Online within Seven Days without Providing a Reason (“Measures”), which will take effect from 15 March 2017.

As a general rule, customers have the right to return goods they have purchased online within seven days after they receive the goods, without providing a reason provided that the quality, functions, components and tags remain intact. The policies do not apply to certain goods specifically identified in the Measures (e.g. fresh food produce, downloaded music, digital products such as software, or newspapers and magazines). The sellers shall refund the purchase price within seven days after they received the returned goods through the original payment channels unless otherwise agreed by the parties.

The Measures also set out obligations for the operators of third party online shopping platforms, including establishing rules and procedures to implement the return policies on their platforms, supervising the compliance status of the sellers trading on third platforms, and facilitating dispute resolution between sellers and customers.

Please click here to read the full text of (Chinese only) of the Measures.