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Read more informationChina: Measures for the Security Review of Foreign Investment
The Ministry of Commerce and the National Development and Reform Commission have published measures for the review of foreign investment presumed to take effect on the 18th of January 2021.
The measures stipulate carrying out a national security review of specific foreign investment categories in the PRC mainland market. It also includes investments by investors from Hong Kong, Macau and Taiwan; the review scope shall consist of aspects connected with procedures, enforcement, supervision and compliance. When a foreign investment is made under specific categories, an application for its review is required to be submitted to The Foreign Investment Security Review Office; foreign investments divide foreign investors on the following criteria:
The measures can be divided into the following categories;
Process
The measures stipulate that a foreign investor is required to secure a consultation with the Review Office before making any formal submissions, following which, an application accompanied with the application report, investment plan, and a statement declaring that the investment is not a threat to national security and all such other documents are to be submitted to the Review Office. Upon conducting a preliminary review of all such documents submitted, the Review Office shall, within 15 days, determine whether a general security review is necessary.
If such a general security review is recommended, the Review Office shall within 30 days upon commencement of the evaluation, determine whether the foreign investment poses any threats to foreign security; if not, whether it has passed the review; determine whether according to the general review a special review is required or not.
In case a special review is recommended, such review shall be concluded within 60 days from its commencement. The Review Office may then determine;
An investor can only proceed with investing in completion of the security review and not otherwise. Failure to adhere to any of the measures as enumerated may attract orders from the Review Office to divest the investment, reinstatement of invested equity, and so on.