Summary of Law Updates:

Labour

1. < Notice on Implementation of the < Notice on Accelerating the “Five Licenses in One” Registration System Reform of General Office of the State Council > from SAIC and Other Four Departments > (2016-07-28)

The Notice on Implementation of the < Notice on Accelerating the “Five Licenses in One” Registration System Reform of General Office of the State Council > from SAIC  and other Four Departments (hereinafter referred to as Notice) has been gazetted by SAIC (State Administration for Industry and Commerce) and other four departments on 28th July, 2016.

According to the Notice, the main requirements are as follows:

1. From 1st October, 2016, the “Five Licenses in One” reform will be carried out nationwide.

2. The “Five Licenses in One, One Code for One License” registration mode shall be implemented for enterprises and farmers’ professional cooperatives (hereinafter referred to as “enterprise”). The Social Insurance Registration Certificate and Statistics Registration Certificate shall be integrated, and the business license with unified social credit code (hereinafter referred to as Unified Code) for legal person and other entities shall be approved and issued by the Administrative Departments of Industry and Commerce. The Social Insurance Registration Certificate and Statistics Registration Certificate are no longer issued separately.

3. Before 1st January, 2018, issued licenses remain in force. When the transition period ends, the business license with unified code shall be applied, and those not renewed are no longer valid.

4. For enterprises that have already obtained the Social Insurance Registration Certificate and Statistics Registration Certificate, it is not required to hand in the two certificates.

5. To abolish the regular verification and renewal system for Social Insurance Registration Certificate and Statistics Registration Certificate. The items that required by previous verification and renewal system for enterprises to submit, shall be incorporated into the contents of annual report of an enterprise. The report shall be submitted to administrative department of industry and commerce and publicized to the society by the enterprise.

In addition, the General Office of Ministry of Human Resources and Social Security gazetted the < Notice on Completion the “Five Licenses in One” Social Insurance Registration for Enterprises > on 22nd August, 2016. There are some changes in the process of social insurance registration and employee insured registration for enterprises. It is suggested that enterprises to pay close attention to the new process for local registration.

Health and Safety

1. < General Rule on Censorship of Food Production Permit > (2016-10-01)

The General Rule on Censorship of Food Production Permit (hereinafter referred to as General Rule) was gazetted by China Food and Drug Administration on 9th August, 2016 and it will come into force on 1st October, 2016. The main requirements of the General Rule are as follows:

• The ways of permit censorship are defined. The General Rule defines the censorship of production permit as two ways which are documentation application review and on-site verification.
• Optimized requirements of on-site verification. The General Rule defines not only the situations for which on-site verification shall be applied, but also comprehensive requirements for on-site verification including verification team, items for verification, procedure, time frame, records and result confirmation, especially explicit requirements for observer to participate in on-site verification. It optimized the verification score sheet, attendance sheet and enhanced the operability of on-site verification.
• Improved the censorship mechanism of permit. The General Rule endows the applicant with opportunity to take corrective action. If the conclusion of on-site verification is passed but with some deficiencies on management system, the applicant is allowed to rectify those deficiencies within a month.
• Established convenient service mechanism on administrative permit. Measures are taken for the convenience of general public through de-concentration of permit decision making, allowing the applicant to authorize an agent to apply for production permit, providing an option to waive on-site verification if certain conditions are met, and adoption of modern technologies on information network.

2. < PRC Law of Prevention and Control of Occupational Diseases > (2016-07-02)

The amendment of < PRC Law of Prevention and Control of Occupational Diseases> (hereinafter referred to as Occupational Disease Prevention Law) was adopted by the Standing Committee of the National People’s Congress and it has come into force on 2th July, 2016. The main changes of the Occupational Disease Prevention Law are as follows:

• For construction, reconstruction or expansion project, technological innovation and transfer project which may conduce to occupational hazards, construction entities shall carry out pre-evaluation on occupational hazards in the feasibility study phase, it is no longer required to submit a pre-evaluation report on occupational hazards to the safety supervision and administration department for approval.
• The design of occupational protective facilities for construction project shall meet the national occupational health standards and hygiene requirements. It is no longer required to report to the safety supervision and administration department for review prior to constructing.

Environment

1. < PRC Law of Environmental Impact Assessment > (2016-09-01)

The PRC Law of Environmental Impact Assessment (hereinafter referred to as EIA Law) was amended and adopted by the Standing Committee of the National People’s Congress on 2nd July, 2016, and has come into force on 1st September, 2016. Highlights of the amendment are as follows:

1. EIA approval is simplified

• The management of Environmental Impact Registration Form is changed from examination and approval to registration. From now on, the Environmental Protection Department only examines and approves the Environmental Impact Report or Environmental Impact Report Form. Registration is required for Environmental Impact Registration Form and examination and approval are no longer required.

2. Increased penalty on breach of EIA Law

• The procedure of re-application for approval within a definite time is abolished for the construction project without EIA approval prior to construction. According to the amended EIA Law, the consequence for the construction project without EIA approval prior to constructing is no longer “order to stop constructing and re-application for approval within a definite time” but “order to stop constructing and with direct penalty”.
• Increased the costs on breach of law for the construction project without EIA approval prior to constructing. It is provided by the amended EIA Law that for the construction project without EIA approval prior to constructing, the consequence is amended from “can be penalized not less than RMB 50,000 but not more than RMB 200,000” to “can be penalized not less than 1% but not more than 5% of its total investments, and can be ordered to restore to its original state”. If the project investment is over RMB 100 millions, then the penalty will be over RMB 1 million; if it is ordered to restore to its original state, it means that all the previous investment by the enterprise will be lost. The economic losses for enterprises breaching the law would be significant.

China Minimum Wage Standard Update –September 2016

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