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The China Law News keeps you on top of business, economic and political events in the China.
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In the News
China to fix copyright law draft amendment

BEIJING - The National Copyright Administration (NCA) will revise a draft amendment to China's copyright law that has stirred controversy since being circulated to seek public opinion, according to a Friday announcement by the NCA.

The NCA has received 1,560 comments concerning 81 articles in the draft amendment since it was published on March 31, according to the administration.

The NCA will therefore revise the draft amendment based on the public's suggestions, as well as those from a committee of experts, and publish the revised version to seek more opinions before the end of this month, an NCA official said.

The draft amendment has triggered heated discussion among members of the public. It has also drawn wide attention from trade organizations and businesses from the United States, the European Union, Britain and Japan, as well as from Hong Kong and Taiwan.

Public feedback has mostly concerned statutory licensing, collective management of copyrights, the review obligations of network service providers, legal liability for non-exclusive license users, compensation for damages and the registration of copyrights.

Chinese music composers have expressed anger regarding the draft amendment, as they believe it will diminish their professional rights if passed.

Article 46 of the document stipulates that music producers may use a musical work from another recorded product, as long as it has already been published for more than three months, in their own productions without having to obtain consent from the copyright holder. The article says producers must report the use to relevant government authorities and fairly compensate the original artist.

The draft says that if the copyright holder does not state otherwise, royalties for such use will be collected through collective copyright management organizations.

Composers have complained that the draft may deprive them of their copyright interests.

Industry insiders have also expressed concerns that the provisions will make record companies less willing to invest in record promotion.

However, some legal experts have suggested that the composers have misunderstood the draft and are overreacting.

The copyright law amendment comes at a time when authorities are making more efforts to crack down on copyright infringement, including online piracy, as the country has seen an increase of cases related to intellectual property rights (IPR) protection.

In 2011, courts at all levels nationwide handled 59,612 new IPR-related civil cases and concluded trials for 58,201 cases, up by 38.86 percent and 39.51 percent, respectively, from the previous year, the Supreme People's Court (SPC) spokesman Sun Jungong said at a press conference in April.

Moreover, local courts received 5,707 new criminal cases involving IPR issues, an increase of 42.96 percent year on year, Sun said.

According to an online poll conducted by the China Youth Daily, 92.7 percent of 17,576 respondents admitted that they had bought or used pirated goods themselves.

A total of 65.9 percent of respondents said poor copyright protection may undermine authors' ability to innovate, while 64.2 percent said it could impair the country's cultural innovation.

Web link: http://www.chinadaily.com.cn/business/2012-05/19/content_15337482.htm

New standards for fuel to reduce pollution

Beijing will introduce new fuel standards on May 31 that municipal officials say are nearly on a par with the European Union's Euro V, the first Chinese city to do so.

All fuel sold by retailers in the Chinese capital will be required to adhere to the new standards, which are expected to reduce sulfur dioxide emissions from 50 to 10 milligrams per kilogram, according to the Beijing environmental protection bureau.

"The new Beijing V standard fuel, once implemented, will greatly reduce the amount of pollutants in the air, including the PM 2.5, (particulate matter with a diameter smaller than 2.5 micrometers) and improve the city's air quality," said Li Kunsheng, director of the bureau's vehicle management department. "The capital will become the first in the nation to meet the benchmark."

Li said Beijing's new standards will be close to the Euro V fuel standards. The European standards are the strictest in the world, according to Zhao Lijian, a researcher with the Energy Foundation.

According to Li, the most vital improvement of the new fuel is that it contains less sulfur, a major air pollutant.

"Excessive sulfur will lead to greater pollution," Li said.

The cleaner fuel will also increase engine efficiency and reduce fuel consumption, Li said.

According to experiments conducted by the China Automotive Technology and Research Center, the new fuel will cut pollutant emissions by 15 percent.

"People can imagine, the tremendous improvement of the city's air quality if all of the more than 5 million automotive vehicles in the city adopt the new petroleum," Li said.

The production of low-sulfur fuel will increase costs, said Fu Xingguo, an engineer at Sinopec Corp, China's largest oil refiner. However, the price of fuel will not be raised in the coming half year.

Fu also said Sinopec and China National Petroleum Corporation have mastered the technologies of petroleum refining, with the country's oil processing capacity reaching 450 million tons in the year 2011.

"However, we are still challenged by the shortage of crude oil resources for the moment," he said.

Fu said some 56.5 percent of the oil was imported last year and had a high sulfur content.

Car emissions have been increasing over the past few decades. "The exhaust emitted by automotive vehicles has replaced the coal-boilers to become the biggest source of air pollution in Beijing," Du Shaozhong, former deputy director for the Beijing environmental protection bureau said in February.

Beijing has more than 5 million vehicles and 10 million registered drivers.

According to Li, drivers from other provinces also have to pump the refined gasoline or diesel fuel when coming into the capital.
"This is the rule of the city," he said.

Ma Jun, director of the Institute of Public and Environmental Affairs, said improved fuel quality and emission standards are key to improving the air quality.

"With many cities nationwide still adopting less strict fuel standards, Beijing is very much ahead of them," he said.

Shanghai is adopting the China IV fuel standards and is considering implementing strict standards in 2013, according to the Shanghai environmental protection bureau.

However, Ma said execution and joint efforts with neighboring provinces are equally important.

Web link: http://www.chinadaily.com.cn/business/2012-05/18/content_15330365.htm

Stricter rules but China still welcomes foreigners

BEIJING - Foreigners worry that China is becoming less friendly towards them after Beijing police recently announced a one-hundred-day campaign to curb the illegal entry, residence and employment of foreign nationals.

However, the campaign should be no threat to foreigners legally residing in the country.

The campaign, which will run until the end of August, will include household checks in Wangjing, Sanlitun and Wudaokou, areas of the city known for high concentrations of foreign residents, as well as on-the-spot street checks that will require foreigners to present valid identification.

Curbing illegal entry, residence and employment is, in fact, an international issue, which has bothered many developed countries for years.

Illegal entry, stay and work of foreigners in China not only poses difficulties for social management, but more importantly can lead to increased criminal activity, says Prof. Xiang Dang with Chinese People's Public Security University.

The announcement of the police campaign came after a video of a drunken British tourist allegedly assaulting a girl in Beijing was uploaded onto the Internet. Another online video of a Russian cellist putting his feet on the seat of a woman passenger in front of him and verbally abusing her has also recently caused outrage.

Chinese working and staying overseas are required to observe the local laws and regulations. Equally, China expects foreigners residing here to respect and obey Chinese laws and regulations.

With rapid economic growth over three decades, the country is attracting an ever-increasing number of foreigners coming to work and stay.

Stricter rules don't mean that China's openness and inclusiveness to foreigners are changing, but mean better management.

A draft law on China's exit and entry administration is in the process of deliberation by China's legislature. A new visa category titled "talent introduction" has been added to the draft law.

Officials said that China will make greater efforts to resolve issues related to overseas talents' visas and residency permits this year. Meanwhile, China will bolster favorable treatment for them with advantageous policies in social insurance, taxation, medical services, their children's education and academic funding.

Web link: http://english.peopledaily.com.cn/90882/7826537.html

New measures mulled for greener economy

China is mulling whether to impose a consumption tax on "high-polluting, high resource consuming" products, according to officials from the Ministry of Environment Protection.

Citing an unnamed official, Economic Information, a newspaper affiliated with Xinhua News Agency, reported the ministry is planning to implement eight measures during the 12th Five-Year Plan period (2011-15) to promote a greener economy.

These measures, besides a consumption tax, include raising the current pollution fee standard and issuing environment protection bonds.

The official said the government is considering expanding the number of pilot cities that have conducted "green" tax reform.
These reforms include replacing the former environment fee with an environment tax and imposing a resource consumption tax.

Green enterprises should be encouraged through various tax reduction measures, the official said.

Banks should also adopt a green credit policy to give favorable loans to green enterprises and limit credit access to high-polluting and high resource consuming enterprises, according to the official.

Web link: http://www.chinadaily.com.cn/business/2012-05/30/content_15425705.htm

Smuggled solid waste returned to Rotterdam

More than 700 tons of smuggled solid waste has been sent back to the Netherlands, its country of origin, Chinese authorities said on Friday.

The illegal shipment consisted of 30 containers holding 763 tons of household garbage, which had been smuggled into China from the Netherlands. They were loaded onto ships at Zhangjiagang, in Jiangsu province, on Friday morning and will reach the Port of Rotterdam at the beginning of July, according to a statement released by customs authorities in Nanjing, capital of the province.

Smuggled in with the aid of fake shipping documents, the batch of waste was bought by Hepu, a trading company in East China's Anhui province, through a firm in Taiwan, the statement said.

"We paid more attention to this case because the shipped waste is household rubbish that should be banned from entering our country according to Chinese laws and regulations," said Si Yongsheng, deputy director of the Nanjing Customs office.

On Dec 29, Xin Fei Zhou, a cargo ship carrying the 30 containers, arrived at the Zhangjiagang port. A document onboard said they contained waste paper, according to the statement.

"At first, we found that the quality of the first two containers' contents was fine and thought it was nothing different from before," Si said.

Even so, customs workers continued unpacking the containers, eventually growing surprised at what they saw.

"Opening up the remaining containers was like turning over big trash cans," said a customs officer who took part in the check.

The garbage, which included musty paper, plastic bottles and rotten diapers, was scattered everywhere. Among it was trash that environmental experts would not allow to be imported, said the officer, who did not want to be identified.

Following an investigation, the customs workers found the case involved a trading company in Anhui province that had purchased the trash from a fiber company in the Netherlands, using a Taiwan company as an intermediary, the statement said.

Chinese regulations ban imports of solid waste that cannot be used as raw materials or that pose a serious risk to the environment.

"So companies might look for loopholes in the law and use their right to dispose of recyclable solid waste as a way to screen their transportation of household trash," the officer added.

On Feb 19, customs police arrested two men they believe are involved in the case. Police say one of them said he had made fake documents with a man surnamed Geng, who is suspected of smuggling, and that they had both given false information to customs officials.

Meanwhile, customs authorities found the Dutch company had been in the practice of transporting more than 2,000 tons of domestic garbage through Taiwan.

"The suspects decomposed the household rubbish," said Li Duokuan, director of the Nanjing Customs office, adding the authority will fight this kind of smuggling in the future.

A ton of refined newsprint now costs 2,000 yuan ($315) and a ton of plastic bottles 4,000 yuan, according to the statement.

Chen Liwen, a researcher at Green Beagle, a Beijing environmental protection group, say many businessmen have benefited from the trade in low-quality solid waste from foreign countries.

"If customs authorities can't check for these abuses in a stricter way, domestic garbage from developed countries will pollute our country and damage Chinese people's health," she said.

Zeng Xinhua, a researcher in the criminal law academy at Beijing Normal University, said the suspects in the case could be sentenced to spend at least five years in prison if they are found guilty, according to Chinese Criminal Law.

From the end of last year to March, customs authorities investigated five similar cases involving more than 4,000 tons of foreign household rubbish. Those led to the arrest of seven suspects.

In 2011, China's customs authorities uncovered 1,121 cases of the importation of illegal solid waste. They involved 10,400 tons of waste metal, 16,000 tons of waste plastics and 250,500 tons of other waste.

Web link: http://www.chinadaily.com.cn/china/2012-06/02/content_15454275.htm

Lehman, Lee & Xu is a top-tier Chinese law firm specializing in corporate, commercial and intellectual property matters. For further information on any issue discussed in this edition of China Law Digest , or for all other enquiries, please e-mail us at mail@lehmanlaw.com or visit our website at www.lehmanlaw.com and Mongolia www.lehmanlaw.mn.

Lehman, Lee & Xu Mongolia is one of the first and only international law firms with a full time presence in Mongolia.  Our Ulaanbaatar office is staffed with resident foreign legal consultants having significant experience in Mongolia and qualified Mongolian attorneys. The firm’s foreign legal consultants and local attorneys are fully acquainted and experienced with Mongolia’s laws and legal system, business climate and political affairs. For any Mongolian legal matters please refer to our Mongolian website www.lehmanlaw.mn.

© Lehman, Lee & Xu 2012.
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