23 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA non-compete agreements, intellectual property, internal financial controls, anticorruption compliance for overseas investments, regulatory compliance for listing, and digital compliance, among others. “In practice, a company usually chooses three to five areas from the above to build its compliance management frameworks based on its industry, business operating conditions, business model, etc.” KEY SERVICES Yi focuses primarily on serving international contractors, companies in the upstream and downstream sectors of the energy and new energy industries, as well as certain electric vehicle enterprises expanding abroad. She notes that the content of overseas compliance services provided by lawyers varies according to the specific needs of the enterprises. One type of demand, referred to by her as “proactive compliance,” involves companies actively building a cross-border compliance management system in line with their international business strategic layout. The role of the lawyer is primarily to ensure that the compliance scenarios mentioned above are addressed, while also covering all regions where the company conducts international business. This includes establishing the compliance management system and pursuing international certification. Over the past few years, Liu has led Zhong Lun’s global compliance team to provide compliance services for clients in a wide range of industries. Specifically, building overseas compliance management frameworks for enterprises is also a key service provided by him and his team. Liu gives the example of the China Power International Development project which he has recently advised on. “We assisted the company to complete the development of its overseas compliance management framework in 2022 and 2023 and pass ISO37301 and GB 35770 dual certification.” Liu highlights the importance of obtaining compliance certification. “Compliance certification is like a name card which can clearly show the level of compliance a company has already achieved.” Meanwhile, another type of overseas compliance needs is what Yi calls “passive compliance”, which mainly refers to the responses taken by enterprises to compliance investigations launched by multilateral financial institutions. Yi explains that, for example, international contractors she serves must meet very stringent compliance requirements if their overseas infrastructure projects are funded by loans or aid from the World Bank or the Asian Development Bank. “If multilateral financial institutions believe that a company has engaged in inappropriate behavior during the submission of bid documents or project progress, it will face a compliance investigation, be required to make corrections, and possibly face sanctions. In such cases, lawyers must assist the company in conducting an independent and effective internal compliance investigation, implement a series of remedial compliance measures, and help respond to multiple inquiries from the bank. These remedial compliance measures include assisting the company in further improving its existing compliance management system to achieve a settlement and avoid final sanctions. This effectively means completing and perfecting the internal compliance management system in a passive state.” Liu has also led his team to successfully complete projects in this regard, such as assisting a Zhejiang-based company in water conservancy engineering to respond to relevant sanction investigations. “The World Bank originally planned to impose a nine-year sanction on the company. However, through our work of response, negotiation, investigation and communication, the sanction period was reduced to two years. Thereafter, we helped the company establish a comprehensive compliance framework within two years and pass the World Bank’s inspection, and the ban was completely lifted.” AREAS TO WATCH Given the continued intensification of great power rivalry, Liu predicts that new overseas compliance issues faced by Chinese companies are likely to “emerge one after another”, including issues related to Iran, human rights issues, etc. “Chinese companies need to be more alert and attach more importance to overseas compliance”. In particular, he says that in overseas transactions, the old approach of merely hiring transactional and financing lawyers is no longer advisable. “Clients must have compliance and risk control lawyers at the same time. Especially in projects involving sensitive countries, Chinese lawyers are OVERSEAS COMPLIANCE
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