USCBC Comments on Complaint Mechanism for Foreign Companies

On behalf of the more than 220 members of the US-China Business Council (USCBC), we appreciate the opportunity to submit comments on the Draft of Working Measures for Processing Complaints of Foreign Invested Companies (hereby referred to as “the Draft Measures”) to the Ministry of Commerce (MOFCOM). We greatly appreciate MOFCOM’s efforts to improve the business environment for foreign-invested companies that operate in China.

We note that the current Draft Measures contain many items our members find positive. We are glad to see that the scope of eligible circumstances for complaints has been expanded to include additional policies and administrative practices. We are also pleased by the inclusion of a policy advising mechanism in Article 25. However, our members agree said mechanism requires further clarification. Similarly, our member expressed concern about the extended timeframe for complaint processing and lack of language prohibiting retaliation for complaints.

In particular, we would like to highlight the following suggestions:

  • Expand the definition of complainant to include associations: Many foreign-invested companies use various associations to address policy issues and other challenges in the business environment. Furthermore, expanding complainant status to associations will increase companies’ willingness to leverage the complaint mechanism and make proposals in a more open manner.
  • Add a “no-retaliation” provision: As the complaint mechanism does not allow for anonymous reporting, we recommend the measures therefore explicitly prohibit any retaliation against complainants to ensure consistent reporting of issues as well as efficient enforcement of decisions. We also encourage inclusion of a list of prohibited retaliatory actions in line with Article 39 of the Foreign Investment Law of the People’s Republic of China (“FIL”) and Articles 24 and 25 of the FIL’s Implementing Regulations.
  • Mandate consistent implementation nationally: Inconsistent implementation at the local government level would create uncertainties and challenges for companies. We suggest adding additional clarifying directions for local government implementation to ensure consistency. Specific directions as to the jurisdiction, funding, and level of empowerment of the local agencies would help to avoid disparities in application amongst provinces and municipalities.
  • Shorten the timeframe for addressing complaints: As the complaint mechanism cannot work in parallel with the administrative review and litigation processes, which in some cases are subject to strict statute of limitations of 60 days, in order to ensure companies have access to the full range of available remedies we suggest shortening the timeframe for addressing complaints from 60 to 30 working days.

Read the full comment letter: