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China – Corporate Update: November 2013.

27 November, 2013

 

On 25 October 2013, the general office of the National People’s Congress of the People’s Republic of China (“NPC“) approved amendments to the Law on Protection of Consumer Rights and Interests (the “Amendments“), which were adopted after three readings by the NPC and will come into effect on 15 March 2014. It is the first major overhaul of the law since 1993.

 

Some highlights of the Amendments are set out as follows:

 

1. Regulating New Consumption Models (e.g. Online Sales And Purchases)

 

The Amendments add a set of rules to regulate the booming internet shopping, such as the obligations of providing truthful information by sellers, seven days unilateral termination right of the consumer etc.

 

2. Strengthening “Three-Guarantee” (Repair, Replacement Or Return Of Faulty Products) Rule

 

Under the Amendments, the current three-guarantee rule will continue to apply. Further, if the products fail to comply with certain quality requirements, a consumer is entitled to return such products within seven days of receiving them, unless otherwise specified.

 

3. Consumer Information Protection

 

The Amendments set out various restrictions on sellers with regards to collecting and using a consumer’s personal information.

 

4. Recall Of Defective Goods Or Services

 

The Amendments set out additional measures against sellers with respect to the sale of defective products, including but not limited to the cessation of sales and operations, the recall of the defective goods or services, etc.

 

5. Advertiser’s Responsibility

 

In respect of false advertisement, the Amendments extend the responsibility from manufacturers and service providers to advertisers. 

 

The Amendments come at a time when China has been trying to transition from an investment-led economy to a more consumption-driven model.  The purpose of the Amendments is said to better protect the rights and interests of consumers and to help build a more consumer-friendly society.

 

Clyde & Co

 

For further information please contact:

 

Carrie Yang, Partner, Clyde & Co
[email protected]

 

Emma Yu, Clyde & Co
[email protected]

 

Alina Zhu, Clyde & Co
[email protected]


Homegrown Corporate/M&A Law Firms in China

 

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