Regulations on Administration of Foreign Law Firms’ Representative Offices in China

(Adopted at the 51st Executive Meeting of the State Council
on December 19, 2001, promulgated by the Decree No. 338 of the
State Council of the People’s Republic of China on December 22,
2001, and effective as of January 1, 2002)

Chapter I General Provisions

Article 1 These Regulations are formulated in
accordance with the Law of the People’s Republic of China on
Lawyers for the purposes of regulating the establishment of
representative offices in China by foreign law firms and legal
service activities thereof.

Article 2 These Regulations are applicable to
the establishment of representative offices in China (hereinafter
referred to as “representative offices”) by foreign law firms and
the legal service activities they conduct.

Article 3 Representative offices and their
representatives shall, when conducting legal service activities,
abide by the laws, regulations and rules of China, scrupulously
observe the professional ethics and practice discipline of Chinese
lawyers, and shall not endanger the State security, social and
public interests in China.

Article 4 Representative offices and their
representatives, when conducting legal service activities in
accordance with the provisions of these Regulations, are protected
by Chinese law.

Article 5 Foreign law firms assume civil
liability for the legal service activities conducted by their
representative offices and representatives within the territory of
China.

Chapter II Establishment, Change, and Registration
Cancellation of Representative Offices

Article 6 The establishment of a representative
office in China and the posting of representatives thereto by a
foreign law firm shall be permitted by the judicial administration
department of the State Council.

No foreign law firms, other organizations or individuals may
conduct legal service activities within the territory of China as a
consulting firm or under other names.

Article 7 A foreign
law firm applying to establish a representative office in China and
post representatives thereto shall meet the following
requirements:

(1) it has been in practice lawfully in its home country and
never has been punished for a violation of lawyers’ professional
ethics or practice discipline;

(2) the representatives of the representative office are
practitioner lawyers who are members of the bar or law society of
the country where they obtain the qualifications to practice, have
practiced for not less than two years outside of China, and have
never been punished for a criminal offense or a violation of
lawyers’ professional ethics or practice discipline. The chief
representative of the representative office has practiced for not
less than three years outside of China and is a partner or
equivalent of the said firm.

(3) there is an actual need to establish a representative office
in China to conduct legal service business.

Article 8 A foreign
law firm applying to establish a representative office in China
shall produce the following documents to the judicial
administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government where the proposed representative office is to
be located:

(1) an application signed by the principal responsible person of
the said foreign law firm for establishing the representative
office in China and posting representatives thereto. The name of
the proposed representative office shall be “Representative Office
of ______(name of the said law firm translated into Chinese) in
______(name of the Chinese city where the proposed representative
office is to be located)”;

(2) documents certifying that the said law firm has been
lawfully established in its home country;

(3) the partnership agreement or the articles of association of
the said law firm, and a list of its responsible persons and
partners;

(4) the power of attorney issued by the said law firm to the
representatives of the proposed representative office, and a
written statement confirming that the chief representative is a
partner of the said law firm or equivalent;

(5) certificates of the qualifications to practice of each
representative of the proposed representative office, and documents
certifying that the chief representative has practiced law for not
less than three years outside of China and the other
representatives for not less than two years.

(6) documents from the bar or law society of the said law firm’s
home country certifying that the representatives of the proposed
representative office are their members;

(7) documents from the lawyer administration department of the
said law firm’s home country certifying that the said law firm and
the representatives of the proposed representative office have
never been punished for a criminal offense or a violation of
lawyers’ professional ethics or practice discipline.

The documents listed in the preceding paragraph shall be
notarized by a notary institution or a notary in the applicant’s
home country, authenticated by the competent foreign affairs organ
of the applicant’s home country or an organ authorized by it, and
authenticated by the Chinese Embassy or Consulate in such
country.

The documents submitted by the foreign law firm shall have three
copies, and a corresponding Chinese translation shall be attached
to those in a foreign language.

Article 9 The judicial administration
departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government
shall, within three months from the date of receiving the
application documents, finish the examination of them, and submit
their examination opinions and such application documents to the
judicial administration department of the State Council for
reexamination. The judicial administration department of the State
Council shall make a decision within six months; if the
establishment of the proposed representative office is permitted, a
license to practice shall be issued thereto and certificates to
practice to its representatives; if permission is not granted, the
applicant shall be informed of the reasons in writing.

Article 10 Before conducting the legal service
activities provided for in these Regulations, representative
offices and their representatives shall, on the basis of their
licenses to practice and certificates to practice, register with
the judicial administration department of the people’s government
of the provinces, autonomous regions and municipalities directly
under the Central Government where such representative offices are
located. Representative offices and their representatives shall
register annually.

The judicial administration departments of the people’s
governments of provinces, autonomous regions and municipalities
directly under the Central Government shall handle the registration
applications within two days from the date of receiving them.

Article 11 A
representative office shall, in accordance with relevant laws and
administrative regulations, go through formalities of taxation,
banking and foreign exchange, etc.

Article 12 A foreign
law firm which needs to change the name of its representative
office, or reduce its representatives shall in advance submit an
application signed by its principle responsible person and other
relevant documents to the judicial administration department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government where the said
office is located. Such changes or reduction shall be subject to
the examination and approval of the judicial administration
department of the State Council, and the certificates to practice
of those who do not serve as representatives any longer shall be
withdrawn.

In the case of merger, division or posting of new
representatives, a representative office shall go through the
permission formalities in accordance with the provisions of these
Regulations for the establishment of a representative office.

Article 13 Where a representative of a
representative office falls into one of the following
circumstances, the judicial administration department of the State
Council shall revoke the permission to practice granted to him and
withdraw his certificate to practice, and the judicial
administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government shall cancel his registration to practice
accordingly:

(1) his license to practice in his home country has become
void;

(2) being disqualified as a representative by the foreign law
firm he belongs to;

(3) his certificate to practice or the license to practice of
the representative office he belongs to is revoked according to
law.

Article 14 Where a representative office falls
into one of the following circumstances, the judicial
administration department of the State Council shall revoke the
permission to practice granted to it and withdraw its license to
practice; and the judicial administration department of the
people’s government of the province, autonomous region and
municipality directly under the Central Government shall cancel its
registration to practice accordingly:

(1) the foreign law firm it affiliates to has been dissolved or
the registration of which has been canceled;

(2) the foreign law firm it affiliates to applies to cancel its
registration;

(3) it does not meet the requirements set forth in Article 7 of
these Regulations any longer;

(4) its license to practice is revoked according to law.

The representative offices whose registration is cancelled in
accordance with the preceding paragraph shall be liquidated
according to law, and before the repayment of their liabilities,
their property shall not be transferred out of the territory of
China.

Chapter III Business Scope and Practice
Rules

Article 15 A
representative office and its representatives may only conduct the
following activities that does not encompass Chinese legal
affairs:

(1) to provide clients with the consultancy on the legislation
of the country where the lawyers of the law firm are permitted to
engage in lawyer’s professional work, and on international
conventions and international practices;

(2) to handle, when entrusted by clients or Chinese law firms,
legal affairs of the country where the lawyers of the law firm are
permitted to engage in lawyer’s professional work;

(3) to entrust, on behalf of foreign clients, Chinese law firms
to deal with the Chinese legal affairs;

(4) to enter into contracts to maintain long-term entrustment
relations with Chinese law firms for legal affairs;

(5) to provide information on the impact of the Chinese legal
environment.

Representative offices may directly instruct lawyers in the
entrusted Chinese law firms, as agreed between both parties.

A representative office and its representatives shall not
conduct any legal service activities or other for-profit activities
other than those set forth in the first paragraph and the second
paragraph of this Article.

Article 16 A
representative office shall not employ Chinese practitioner
lawyers; its support staff employed shall not provide legal
services to clients.

Article 17 A
representative office and its representatives shall not commit any
of the following acts in their practice:

(1) to provide false evidence, conceal facts, intimidate or
induce another with promise of gain to provide false evidence or
conceal facts, or obstruct the opposing party’s lawful obtaining of
evidence;

(2) to accept money or other things of value from parties by
using the advantage of providing legal services;

(3) to divulge commercial secrets or private matters of
parties.

Article 18 A
representative of a representative office shall not be concurrently
a full-time or part-time representative in two or more
representative offices.

Article 19 Representatives of a representative
office shall be resident in China for not less than 6 months each
year, if the said representatives fail to do so, they will not be
registered in the following year.

Article 20 A
representative office may charge its clients fees when conducting
legal services provided for in these Regulations. The fees
collected must be settled within the territory of
China.

Chapter IV Supervision and Administration

Article 21 The judicial administration
department of the State Council and the judicial administration
departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government,
in accordance with their duties, are responsible for the
supervision and administration of representative offices and their
representatives.

Article 22 A
representative office shall, before March 31 of each year, submit
to the judicial administration department of the peoples’
government of the province, autonomous region or municipality
directly under the Central Government where it is located for
annual examination a copy of its license to practice and its
representatives’ certificates to practice, and the following
materials of the previous year:

(1) information on their performance of legal services,
including the legal affairs entrusted to Chinese law firms;

(2) its annual financial statement audited by an accounting
firm, and documents certifying that its accounts have been settled
within the territory of China and taxes have been paid according to
law.

(3) information on the change of its representatives and the
employment of Chinese support staff;

(4) information on the residence of its representatives in the
territory of China.

(5) information on the registration of itself and its
representatives.

(6) other information on the performance of the duties provided
for in these Regulations.

The judicial administration departments of the people’s
governments of provinces, autonomous regions and municipalities
directly under the Central Government shall, after finishing the
annual examination of the representative offices that are located
in their respective administrative regions, submit their
examination opinions to the judicial administration department of
the State Council for the record.

Article 23 The judicial administration
departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government
shall, when collecting fees in registering representative offices
and their representatives or collecting fees in conducting annual
examination of representative offices according to law, strictly
follow the same standards for Chinese law firms and practitioner
lawyers which are verified and determined by the pricing
administration department of the State Council. All fees collected
shall be turned over to the State Treasury.

Where the judicial administration departments of the people’s
governments of provinces, autonomous regions and municipalities
directly under the Central Government impose administrative
punishment of fines according to law, the fine decisions and
collection of such fines shall be separated in accordance with the
provisions of relevant laws and administrative regulations. All
fines collected and illegal income confiscated shall be turned over
to the State Treasury.

Chapter V Legal Liability

Article 24 Any representative office or
representative who endangers China’s State security, public
security or administration of public order, shall be investigated
for criminal liability according to the provisions of the Criminal
Law on crimes of endangering State security, crimes of endangering
public security or crimes of obstructing the administration of
public order, and the license to practice of the representative
office or the certificate to practice of the representative shall
be revoked by the judicial administration department of the State
Council. If the case is not serious enough for criminal punishment,
administrative penalties for public security shall be imposed
according to law, and the license to practice of the representative
office or the certificate to practice of the representative shall
be revoked by the judicial administration department of the State
Council.

Article 25 Any representative office or
representative who, in violation of Article 15 of these
Regulations, illegally conducts legal service activities or other
for-profit activities shall be ordered to suspend its/his business
within a specified time limit by the judicial administration
department of the people’s government of the province, autonomous
region or municipality directly under the Central Government. If
the circumstances are serious, the judicial administration
department of the State Council shall revoke the license to
practice of the representative office or the certificate to
practice of the representative.

The judicial administration department of the people’s
government of the province, autonomous region and municipality
directly under the Central Government shall confiscate the illegal
income of the representative office or the representative who
commits the acts set forth in the preceding paragraph, and impose a
fine of not less than 50,000 yuan but not more than 200,000 yuan
respectively on the chief representative and other representatives
directly responsible.

Article 26 Where a representative office falls
under one of the following circumstances, the judicial
administration department of the people’s government of the
province, autonomous region and the municipality directly under the
Central Government shall give it a warning and order it to make
corrections within a specified time limit; if the circumstances are
serious, the judicial administration department of the people’s
government of the province, autonomous region and the municipality
directly under the Central Government shall order a suspension of
its business within a specified time limit; if the representative
office fails to make corrections within the specified time limit,
the judicial administration department of the State Council shall
revoke its license to practice:

(1) employing Chinese practitioner lawyers, or its employed
support staff conducts legal services activities;

(2) failing to settle the fees that it collects for legal
services within the territory of China;

(3) failing to submit relevant materials for annual examination
on time, or failing to pass the annual examination.

If the representative office commits the acts set forth in item
(2) of the preceding paragraph, the judicial administration
department of the people’s government of the province, autonomous
region and the municipality directly under the Central Government
shall impose on it a fine of not less than one time but not more
than three times the money that should have been settled in the
territory of China.

Article 27 Where a representative office or a
representative falls under one of the following circumstances, the
judicial administration department of the people’s government of
the province, autonomous region and the municipality directly under
the Central Government give it/him a warning, confiscate its/his
illegal income, and concurrently impose a fine of not less than
20,000 yuan but not more than 100,000 yuan:

(1) concurrently serving as a full-time or part-time
representative in two or more representative offices;

(2) divulging commercial secrets or private matters of
parties;

(3) accepting money or other things of value from parties by
using the advantage of providing legal services.

Article 28 Where a representative office whose
registration is cancelled transfers its property out of the
territory of China before repaying its liabilities, the judicial
administration department of the people’s government of the
province, autonomous region and municipality directly under the
Central Government shall order a retransfer of the property
transferred out of the territory of China for the repayment of
liabilities. If such transfer seriously infringes upon other
persons’ interests, the chief representative of the representative
office and other persons directly responsible for such transfer
shall be investigated for criminal liability for the crime of
concealing property according to the provisions of the Criminal
Law. If the case is not serious enough for criminal punishment, the
judicial administration department of the people’s government of
the province, autonomous region and municipality directly under the
Central Government shall impose a fine of not less than 50,000 yuan
but not more than 300,000 yuan on the representative office, and a
fine of not less than 20,000 yuan but not more than 100,000 yuan
respectively on the chief representative and other persons directly
responsible for such transfer.

Article 29 Where a representative of a
representative office provides false evidence, conceals facts or
intimidates or induces another with promise of gain to provide
false evidence or conceal facts, he shall be investigated for
criminal liability for the crime of obstructing testimony in
accordance with the provisions of the Criminal Law, and his
certificate to practice shall be revoked by the judicial
administration department of the State Council.

Article 30 Where a foreign law firm, a foreign
lawyer or any other foreign organization or individual conducts
legal service activities within the territory of China without
permission, or where a representative office or a representative
whose permission to practice has been revoked continues to conduct
legal service activities within the territory of China, the
judicial administration department of the people’s government of
the province, autonomous region and municipality directly under the
Central Government shall ban such activities, confiscate the
illegal income, and impose a fine of not less than 50,000 yuan but
not more than 300,000 yuan concurrently.

Article 31 Where the license to practice of a
representative office is revoked according to law, the foreign law
firm that the said office is affiliated to will not be permitted to
apply to establish its representative office in China for five
years; where the certificate to practice of a representative of a
representative office is revoked according to law, he will not be
permitted to serve as a representative of any representative office
in China for five years.

Where a representative of a representative office is imposed a
criminal punishment for endangering the State security, public
security or administration of public order in China, the foreign
law firm that his representative office affiliates to will not be
permitted to apply to establish its representative office again and
the said representative will not be permitted to serve as a
representative of any representative office in China for life.

Article 32 Where a judicial administration
department staff member commits one of the following acts, an
administrative sanction of demerit recording, grave demerit
recording or demotion shall be imposed on the person in charge and
other persons directly responsible according to law:

(1) failing to examine or reexamine the certifying documents on
proposed representative offices and their representatives in
accordance with the requirements provided for in these
Regulations;

(2) failing to conduct registration or annual examination for
representative offices in accordance with the provisions of these
Regulations;

(3) failing to collect fees in accordance with the fee items and
fee standards set forth by the State.

Article 33 If a judicial administration
department staff member commits one of the following acts, an
administrative sanction of demotion, dismissal from the post or
discharge from public employment shall be imposed on the person in
charge and other persons directly responsible:

(1) issuing license to practice or certificate to practice to
proposed representative offices or its representatives which do not
meet the requirements provided for in these Regulations;

(2) using advantage of the office to accept money or property,
or to seek personal gain;

(3) in violation of the provisions of these Regulations, failing
to revoke the permission to practice granted to representative
offices or representatives, withdraw their license to practice or
certificate to practice, or cancel their registration where such
revocation or cancellation shall be done;

(4) failing to issue a receipt for the lawfully collected fines
or failing to truthfully fill in the amount of the fines;

(5) violating the system for separation of the fine decision
respecting and collection of fines or failing to turn over to the
State Treasury the fees and fines collected and the illegal income
confiscated as provided for;

(6) failing to promptly investigate and deal with the violations
of these Regulations by representative offices or their
representatives;

(7) other acts of not strictly enforcing laws or abusing powers
which cause serious consequences.

Those who commit one of the acts set forth in the preceding
paragraph which cause a heavy loss to public property or the
interests of the State and people shall be investigated for
criminal liability for the crime of abuse of power, negligence of
duty or acceptance of bribes in accordance with the provisions of
the Criminal Law.

Chapter VI Supplementary Provisions

Article 34 Measures for administration of the
representative offices established in Chinese mainland by law firms
in the separate customs territories shall be separately formulated
by the judicial administration department of the State Council in
accordance with the principles of these Regulations.

Article 35 These Regulations shall be effective
as of January 1, 2002. Representative offices of foreign law firms
and their representatives which have been approved to operate and
practice on a trial basis by the judicial administration department
of the State Council shall, within 90 days from effective date of
these Regulations, apply anew to handle examination and approval
formalities.

(State Council)