Author: Qiu Jian Zhu Yongchun

As previously reported, the State Council of China issued the Circular on Establishment of Security Review Regime for Foreign Investors’ Mergers and Acquisitions of Chinese Enterprises (“Circular 6”) in February 2011; and, in the following March, the Ministry of Commerce of China (“MOFCOM”) issued the Provisional Regulations on Implementation of the Security Review Regime for Foreign Investors’ Mergers and Acquisitions of Chinese Enterprises (“Provisional Regulations”).  As the Provisional Regulations will expire by the end of this month, MOFCOM issued the Regulations on Implementation of the Security Review Regime for Foreign Investors’ Mergers and Acquisitions of Chinese Enterprises (“Regulations”) on August 26, 2011 and such Regulations will take effect as of September 1, 2011.
 

在此前的新法导阅中，我们报道了国务院办公厅今年2月颁布的《关于建立外国投资者并购境内企业安全审查制度的通知》（“六号文”）以及商务部今年3月份出台的《商务部实施外国投资者并购境内企业安全审查制度有关事项的暂行规定》（“《暂行规定》”）。鉴于暂行规定将于本月底失效，为此商务部已于8月26日出台了《实施外国投资者并购境内企业安全审查制度的规定》（“《规定》”），并将于9月1日正式施行。

In comparison to the Provisional Regulations, we think that it is worth noting the following points of the Regulations:
 

对比《暂行规定》，我们认为《规定》在以下方面值得关注：

1. The Regulations further clarify the applicable scope of the security review regime.  That is, the security review regime applies not only to the mergers and acquisitions of Chinese enterprises directly conducted by foreign investors, but also the investment conducted by foreign-invested enterprises in China, which are Chinese legal entities by nature.
 

《规定》进一步明确了安全审查制度的适用范围，即安全审查不仅适用于外国投资者直接跨境并购中国企业的行为，而且亦适用于外商投资企业（性质上属于中国境内的法律实体）在境内的投资行为。

2. For the purpose of anti-circumvention, the Regulations adopt the principle of substance over form.  Pursuant to the Regulations, “[the authority] shall consider the substance and actual influence of a proposed transaction to determine whether the security review regime applies.  A foreign investor may not circumvent the security review regime by any means, including without limitation, nominee shareholding, trust, multi-layer investment structure, leasing, debt, variable interest enterprise, offshore transaction, etc.”
 

为反规避之目的，《规定》采取了实质重于形式的原则，即“应从交易的实质内容和实际影响来判断并购交易是否属于并购安全审查的范围；外国投资者不得以任何方式实质规避并购安全审查，包括但不限于代持、信托、多层次再投资、租赁、贷款、协议控制、境外交易等方式”。

3. The Regulations reiterate that the security review regime may apply (again) where changes occur to a transaction.  Such changes include particularly “adjustment of M&A transaction, amendment to the transactional documents, change of business operations, and other changes (such as change of overseas actual controlling person)”.
 

 《规定》重申了在交易情形发生变化后再次适用并购安全审查制度的可能性。特别地，交易情形变化包括“调整并购交易、修改有关协议文件、改变经营活动以及其他变化（包括境外实际控制人的变化等）”。
 

4. The Regulations substantially confirm the procedural requirements as set out in the Provisional Regulations, such as the review procedures, application and review timelines, application documents, etc.
 

《规定》实质确认了《暂行规定》的审查流程、申请和审查时限、申请文件要求等程序性规定。
 

Said above, we think that the security review regime set out under Circular 6 and the Regulations may need further clarifications and improvement.  For example, Circular 6 lists industrial sectors that shall be subject to security review regime; however, it would not be easy to ascertain if the proposed transaction relates to “important agricultural products, important energy and resources, critical infrastructure facilities, important transportation services, key technologies, manufacture of important equipment”.  Within such context, it is advisable for an investor to keep communication with authorities in a timely manner during the course of the transaction, such that the investor may accurately understand the applicability of the security review regime and enhance the certainty of the transaction. 
 

另一方面，我们认为六号文和《规定》建立的并购安全审查制度还有待进一步细化和完善。例如，六号文中罗列了安全审查制度适用的主要行业，但要据此确定一项交易是否涉及“重要农产品、重要能源和资源、重要基础设施、重要运输服务、关键技术、重大装备制造等”并不容易。在此情况下，投资者有必要在交易进程中与监管部门及时保持沟通，准确理解安全审查的适用范围和审查尺度，从而增加交易的确定性。