Interpretation of "Code of Conduct for Overseas Investment and Management of Private Enterprises"

 

 Interpretation of "Code of Conduct for Private Enterprises' Overseas Investment Management" (with Mind Map)

Chen Yujia

 

Since the 18th National Congress of the Communist Party of China, under the strong leadership of the Party Central Committee with Comrade Xi Jinping as the core, China's new open economy system has gradually taken shape. Private enterprises are important participants in the implementation of the “going out” strategy in China. In recent years, the pace of “going out” of private enterprises in China has obviously accelerated, and the level of internationalization has been significantly improved. In order to promote the export of related products, technologies and services, promote the transformation and upgrading of domestic industries, promote the construction of the “Belt and Road” and deepen the mutually beneficial cooperation between China and the host countries. Made a positive contribution. At the same time, however, some private enterprises also have irregularities in their overseas investment and business activities. Some enterprises do not perform domestic and international audit procedures, and carry out investment activities outside the country in violation of regulations; some enterprises blindly make decisions and cause major economic losses; some enterprises vicious competition, regardless of the cost of contracting overseas projects; some enterprises ignore quality and safety management, resulting in bad influences.

In response to the problems existing in the overseas investment and management of private enterprises, the National Development and Reform Commission, the Ministry of Commerce, the People's Bank of China, the Ministry of Foreign Affairs, and the five departments of the National Federation of Industry and Commerce jointly issued the "Code of Conduct for Overseas Investment in Private Enterprises" on December 6, 2017 ( Hereinafter referred to as the "Specifications", it aims to guide and standardize the overseas investment and operation activities of private enterprises, prevent the risks of overseas investment and management, and promote the healthy and orderly development of "going out".

"requirements:

1. Private enterprises shall apply for filing or approval on their own initiative in accordance with relevant regulations. Private enterprises may not illegally obtain foreign exchange, transfer assets and conduct money laundering activities through false overseas investment.

2. Private enterprises should adhere to the main body of the enterprise, market operation, independent decision-making, self-financing, self-financing, and prudent efforts, and strive to improve the company's ability to innovate, core competitiveness and international operation.

3. Private enterprises should strengthen supervision and management of overseas branches in terms of fund transfer, financing, equity and other equity transfer, reinvestment and guarantees, prudently carry out highly leveraged investments, and regulate overseas financial derivatives investment activities.

4. Before acquiring a foreign enterprise, a private enterprise shall conduct an environmental due diligence investigation on the target enterprise, focusing on assessing the hazardous waste, soil and groundwater pollution formed in its historical business activities, and the environmental liabilities related to the target enterprise.

5. Private enterprises that follow the project of using credit insurance of Chinese financial institutions abroad may not make external financing or insurance commitments without obtaining the letter of credit or insurance intention issued by the relevant financial institutions.

6. Private enterprises shall adhere to fair competition in overseas investment operations and resolutely resist commercial bribery. They shall not pay bribes to local public officials, officials of international organizations or related enterprises. Do not collude in bidding, do not disparage competitors, and do not falsely publicize performance or take other unfair competition means.