22 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 JULY 2024 Since last year, “going global” has become the most discussed topic among Chinese companies in their business development. Companies have shifted from simple product exports and overseas asset mergers and acquisitions to pursuing more in-depth, localized operations overseas. A new generation of global companies that are “made-in-China” is emerging. Any company attempting to enter a new market will inevitably face scrutiny. In today’s geopolitical environment, Chinese companies are facing increased questioning abroad, posing a greater challenge to their overseas compliance capabilities. According to Yi Fang, partner at JunHe, since its appearance in corporate lingo in 2018, “compliance” has quickly extended to the field of overseas operations. Liu Xiangwen, partner at Zhong Lun Law Firm, says that overseas compliance issues began to appear on Chinese companies’ radar after former U.S. President Trump took office in 2017. With China and the US engaged in an all-encompassing great power rivalry, these issues have now extended to various industries and compliance areas. Since the latter half of 2023, China’s advantageous industries, particularly in new energy, have accelerated their pace of overseas exports. This has created significant pressure on relevant industries within Europe and the US. In response, these regions have intensified regulatory investigations and law enforcement, further escalating corporate compliance concerns, says Liu. “It is expected that in the next five to ten years, tightened overseas regulation will become the norm facing Chinese companies, which will raise higher overseas compliance requirements on them,” Liu adds. Meanwhile, with the concept of compliance extending overseas, its dimensions have become more complex. “Overseas compliance is a multifaceted concept, encompassing at least the following dimensions: adherence to the outbound investment regulations of the home country; compliance with the host country’s legal requirements; observance of international conventions and standards set by standardization organizations; adherence to trade and overseas enforcement regulations enforced through ‘long-arm jurisdiction’ by the US and Europe; industry-specific guidelines, standards, and practices. Additionally, it includes internal corporate bylaws and regulations, and even human rights and ethical standards. The content is extremely complex, and there may be conflicts among different compliance requirements.” explains Yi. Based on this broad scope and potential conflicts, Yi explains that each company must establish a unique “compliance scenario” when building a cross-border compliance system. This means creating different compliance management systems tailored to the company’s operational needs. Common compliance scenarios include ESG compliance, supply chain security, export customs control, compliance in the context of US and European trade remedies, cross-border labor management, protection of trade secrets and OVERSEAS COMPLIANCE The international business operations of Chinese enterprises are constantly evolving, and the scope of overseas compliance they must navigate is becoming more diverse and complex. In response, Chinese law firms are steadily enhancing their expertise and capabilities in providing legal services related to overseas compliance. “oIvt ei sr seexapsercetgeudl at ht iaotni nwti hl l ebne ec ox tmf iev tehteo nt oe nr my ef aa rcsi n, tgi gChhti enne es ed companies, which will raise higher overseas compliance requirements on them.” — Liu Xiangwen, Zhong Lun Law Firm “预计在未来5-10年，境外强监管将成为中国企业面对的常态化趋势，这对中 国企业提出了更严格的境外合规要求。” — 刘相文，中伦律师事务所 中国企业的国际化经营需求及能力不断提升，他们所面对的境外合规维度也日益多元、深度不断加剧。在此背景 下，中国律师事务所正在持续提升境外合规领域的法律服务能力。 BY HU YANGXIAOXIAO 作者：胡阳潇潇 NAVIGATING COMPLIANCE COMPLEXITIES 穿越合规“迷雾”
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