Exequatur Subway 2009: A judgment confirming well-established case law recognizing exequatur to an American arbitral award rendered by application of an arbitration agreement accepted by the parties.
"The life and blood of international commerce" (1) is the term used by English courts to characterize documentary credit.
Documentary credit can be defined as "the operation by which a banker, intervening on the order of a buyer for the financial settlement of a commercial transaction, most often international, promises to pay the seller against delivery of documents" (2).
According to Dean Jean Stoufflet, the documentary credit technique is "the greatest success of international trade in terms of banking mechanism" (3).
Other authors have called it "a true masterpiece of banking technique" (4).
Indeed, in international affairs, due to the geographic distance of the contracting parties who often do not know each other and it is difficult for them to trust the first operation.
The exporter is hesitant to undertake the manufacture or delivery of a product if he is not sure of being paid. For its part, the importer is reluctant to pay funds to the exporter before being sure that the shipment has been completed within the prescribed time.
Documentary credit, by involving the independent and solvent intermediaries that are the banks, therefore constitutes a means of payment which has the advantage of reconciling the divergent interests of the buyer and the seller.
The seller is guaranteed to receive against delivery of certain documents, the price due to him due to the delivery of the goods within the agreed time.
The buyer, on the other hand, will only have to pay for the goods ordered if it has actually been sent to him.
As such, it can be considered that documentary credit is an instrument of confidence based on the international banking system.
Thus the myriad of commercial transactions and the development of international exchanges make documentary credit one of the most important instruments of international trade.
Consequently, the monumental development of international trade in China is necessarily accompanied by the development of documentary credit, we can even say that in China the use of documentary credit is an essential operation for carrying out commercial transactions with foreign partners. .
In the international business community, documentary credit has been the subject of
regulations issued by the International Chamber of Commerce (ICC), organization
international private sector which has developed uniform rules applicable by traders
coming from very different economic and legal systems. The effectiveness of these rules has been
demonstrated by practice and sanctioned by case law. These "Rules and Practices
Uniforms relating to Documentary Credits' (UCP) were published for the first time
in 19335. Regularly revised to monitor and support changes in practice,
their latest version the "RUU 600" replacing the previous version the RUU 500 dating
of 1993 entered into force on July 1, 2007. The UK as lex mercatoria receives
consequently its full application in China by recognizing the right of the parties to
choose the rule of law applicable in international transactions involving the use
documentary credit.
On the other hand, at the national level, it did not exist 4 years ago in China, as in many
other countries, including France, no legal or regulatory provision governing credit
documentary. Chinese state law which is intended to apply to supplement the
possible shortcomings of the UCP is constituted by the provisions contained in the Law on
General Principles of Civil Law, the Law on Contracts, the Law of Security Interests and the Law of
Civil Procedure. However, due to the fact that these provisions are generally very vague and are
therefore open to interpretation by the judge, and that case law is not a real
source of law in China, since 1995, disputes over documentary credits have been
extensively brought before the People's Court of China.
Until 2004, the Supreme Court of China has ruled on more than 100 cases, without
count hundreds of questions relating to documentary credits posed to the Court
Supreme by the lower courts. Thus, China Banking Regulatory Commission, banks
sales representatives also asked questions about the enforcement of court judgments
concerning documentary credits, given that legal explanations or
regulations emanating from the Supreme Court constitute one of the most important sources of law.
important in the Chinese legal system.
Having regard to these various questions raised in practice, particularly with regard to the law applicable to documentary credit, the criterion of document verification, fraud etc., the Supreme Court of China, after having made a global study and discussions with lawyers, practitioners, banks and CCI experts in China, drawing inspiration from the RUU500, adopted on October 24, 2005 the Rules of the Supreme Court on some questions concerning credit disputes documentary, which entered into force on January 1, 2006. Although the general provisions provided for in the aforementioned laws are still applicable, the Regulations provide judges and thus practitioners with more accuracy and precision in the event of diverging interpretations and also completes gaps under the UCP. However, this Regulation is not without faults, especially since the entry into force of RUU 600.
Regarding the scope of the Rules of the Supreme Court on some issues
concerning disputes relating to documentary credit, its first article provides that the
Rules apply to disputes relating to the issue, notification, modification,
revocation, negotiation and lifting of documentary credit. Here, the word "revocation"
means the application of the Regulations to revocable documentary credits. Expression
revocable credit means the documentary credit that can be amended or canceled by the bank
Issuer at any time and without agreement or information from the beneficiary 6.
However, in practice, revocable credits have disappeared for several years. Pulling
the lessons of this development, the UCP 600 no longer refer to the concept of credit
revocable. Drawn up under the control of UCP 500, the Regulation did not take into account this
evolution, which on the other hand gives the issuing or confirming bank the possibility
to attach the irrevocability of their commitment to pay conditions calling into question
the very principle of this commitment. These so-called "soft clauses" would have
consequence of making revocable documentary credits and therefore considerably harms
the interest of the beneficiary. Indeed, only the irrevocable credit is a real guarantee for the
beneficiary insofar as this type of credit constitutes a firm commitment by the banker
transmitter. The revocability of the documentary credit is contrary to the very principle of this
guarantee, consequently it would be preferable for the Regulation to delete in its field
the revocation of the documentary credit to be compatible with UCP 600 and
truly reflect business practice.
This article is limited to presenting two essential points of the documentary credit provided
by the Regulation which in practice give rise to more problems, namely the verification of
documents (I), and documentary credit fraud (II), as well as some thoughts on these
points under the rules of RUU600.
Document verification is an essential mission of the banker in the context of a documentary credit. As Mr. Affaki notes, "in an operation which is marked by the separation between the underlying commercial contract and the banking intervention, the outcome of this intervention is exclusively a function of documents and not of the realization of facts which may be reflected there ”(7). It is an important and growing source of litigation in the practice of documentary credit. This situation obviously affected the safety of the technique. It appeared that more than 70 % of the first presentations were irregular. Most of the difficulties relate to issues of document compliance. It is therefore one of the objects of the Regulation to minimize the risk of rejection for irregularity of documents.
Section 5 of the Regulations provides that the issuing bank is required to honor its commitment to documentary credit when the documents presented are apparently in conformity with the terms of the credit, and all documents are apparently compatible with each other. It appears that the criterion of document verification in China is the criterion of strict compliance of documents with the stipulations of documentary credit. It is obvious that the banker cannot know all the commercial uses and consequently the beneficiary cannot ask him to consider as conforming documents which are not strictly identical to the stipulations of the credit.
Thus a bank does not have to interpret the description of a commodity, even when the
terms used in documents separate from those of the credit, for professionals of the
strictly equivalent trade. In a judgment of the Guansu Court of Appeal on June 25, 2007,
the Court supported the refusal of payment by the confirming bank, considering that the name
of the goods "grapes" stipulating on the invoice does not correspond to the name "dried
currents ”appearing in the documentary credit, although in international trade this
or almost the same goods. It should therefore be noted that the criterion of conformity
substantive was not upheld by the Chinese People's Court, which is contrary to the
jurisprudence of certain countries and in particular of the United States. Consequently, article 5 of
Regulation limits the obligation of the banker to a control of appearance of presentation
compliant. This is a protective rule for the banker in charge of verification who does not
benefit the recipient.
However, the principle of strict compliance has been strongly weakened by the Regulation, which
is also the case law trend, since Article 6 paragraph 2 specifies that in the case of
where the apparent conformity of the documents with the credit stipulations and the
inter-documentary compatibility are not strictly satisfied, since there is no
ambiguity or contradiction between them, the People's Court may consider that the
documents are compliant. Thus the Shanghai Court of Appeal overturned a decision having
excluded the responsibility of an issuing bank towards the beneficiary by qualifying as
a "purely formal" divergence which did not create any ambiguity in the fact that on a
transport document, the names of the recipient of the goods and the one to receive
notification of the arrival of this commodity, appeared in the wrong boxes and did not
not corresponding to the stipulation of the documentary credit.
From this point of view, the Regulation tries to maintain the balance between the interests of the banker
and the beneficiary while preserving the principle of strict compliance of documents by
in relation to the credit stipulations. Nevertheless, provisions of the Regulations drafted
very generally are susceptible to different interpretations, especially in relation to
RUU600 which provides detailed provisions by different types of documents. In
Consequently, these provisions do not give clear answers helping the courts to
rule.
The regularization of rejected documents is always possible as long as the credit is not
expired and that the irregularities are subject to correction. On the other hand, when the
regularization of documents is not possible, Article 7 of the Regulations authorizes the bank
issuer, at its sole discretion, to request the agreement of the ordering party to accept
irregular documents.
However, the authorization to lift irregular documents given by the client
does not oblige the issuing banker to pay the loan to the beneficiary. When the transmitter has
refused the lifting of irregular documents, the payment request of the beneficiary who
prevails of the acceptance of irregularities by the principal, must be rejected by the court.
This is contrary to French case law, since in a judgment of March 11, 2003, the Paris Court of Appeal decided that the bank was obliged to pay in circumstances where the originator, meanwhile declared in receivership , had agreed to the payment of irregular documents. However, it should be remembered that the bank has no obligation to request from the originator any possible lifting of irregular documents even if the latter, without being questioned by the bank, intends to accept the documents. The formality of the documentary credit authorizes the banker, whatever the position of the principal on the execution of the basic contract, to refuse to honor his commitment since the documents presented in support of the request are not strictly meet the specifications of the letter of credit 8.
However, some Chinese lawyers consider that this article, authorizing the banker to refuse
irregular documents, even with the agreement of the principal, resulting in
to the interests of the principal and the beneficiary, and considerably increase the cost of
international transactions with full emphasis on the principle of credit autonomy
documentary. This article does not take into account the purpose of document credit, which is to ensure the
payment of the commercial transaction of which the good progress and the good result, goal
pursued by the parties, namely the ordering party and the beneficiary of the documentary credit.
Fraud is the only exception that can hinder the free play of documentary credit mechanisms. In particular, it hinders the payment of documents which appear to be regular (9). Although the maxim fraus omnia corrumpit is generally accepted by all legal systems, in the area of documentary credit, the qualification of fraud and its taking into account are highly variable (10). Given the differences in fraud between the different legal systems, the RUU600 deliberately leaves the problem to national law.
On this issue which generates as much difficulty as the verification of documents
in practice both for the banker and for the Court, the Regulation therefore clarifies the
qualification of documentary credit fraud and its effect on bankers, the
principal and beneficiary. However, this qualification is questionable, according to many
lawyers and practitioners, because its scope considered too broad.
Article 8 provides that fraud is established when the beneficiary:
Under this article, it is interesting to note that by listing the cases of fraud, it does not give its definition or characteristics, which suggests that the article applies to all frauds. provided for in these four cases, contrary to American or French case law which requires that fraud be substantial or manifest.
This would have the effect of widening the scope of the fraud exception principle and
lead to even more refusal of payment by the banker who could easily invoke
fraud, and consequently compromise the efficiency and speed of documentary credit.
Regarding the first and third scenario, that is to say the beneficiary infringed or
falsified documents or presented documents that he knew were false as soon as
the origin; and the beneficiary, with the collusion of the principal or a third party, presenting
false documents without any real transaction, we can see that these are the most
more common in practice, and relatively easy to establish.
However, what raises the most problem is the second scenario in which the
beneficiary in bad faith does not deliver the goods or delivers the goods
devoid of any value. Here, the border between the poor execution of a contract
commercial and fraud could raise difficulties of appreciation. A fortiori, the
bad faith on the part of the beneficiary is sometimes difficult to demonstrate. In a judgment of the Court of Appeal
of Tianjing on November 28, 2006, the Court found the issuing bank liable
citing fraud in the circumstances in which the seller issued, instead of a certain
dry medicinal plant, the fresh medicinal plant which has rotten during transport from
China in Korea, on the grounds that the fresh plant fully met the stipulation of
documentary credit that did not specify the condition should be this plant.
It should be noted, however, that in this case, the bad faith of the seller could have been
established from the fact that the fresh plant has practically no medicinal effect, and the
recipient should have anticipated the possible rotting during the long transport.
As for the last paragraph, it groups together all the other frauds not provided for by the
three cases, which leaves a wide margin of appreciation to the courts. It shows
that the acts which could be qualified as fraud do not appear to be clearly defined by the
Regulation and therefore the application of the fraud exception principle raises
often many difficulties, legal uncertainty remaining.
Article 9 of the Regulations provides that the fraud provided for in Article 8 authorizes bankers
and the principal to request the Court to suspend payment of the credit
documentary. Thus, it deprives the beneficiary of his rights under the documentary credit and
exonerates the responsibility of the banker, whether it is an issuing bank,
confirming, nominated or negotiator.
Article 10 also specifies that once fraud has been noted by the Court, it must order the suspension or cessation of payment of the documentary credit, except in the following cases when:
It is therefore considered that the issuing or confirming banker is required to reimburse the bank
intermediary authorized to carry out the documentary credit if this bank has regularly
carried out, before the discovery of the fraud, the credit in view of apparently compliant documents
the stipulations of the documentary credit.
The fraud therefore opens recourse to the banker who paid the documentary credit and
this, even if the banker committed a fault in the verification of the documents and paid the
documentary credit without any reserve since it has not discovered the fraud before
payment and was thus in good faith. However, what is very regrettable is that the text does not
not provide for the cases of documentary credits payable in the future where the intermediary bank
had paid the beneficiary in advance of the date agreed for the completion of the
documentary credit. It should therefore be added to this text that the banker who anticipates the
realization of the documentary credit does so at its own risk.
In the same vein, the principal will have to reimburse the issuing banker who has
lifted "false" documents when there was nothing to suspect their authenticity. Se
asks the question of knowing when the principal is availing himself of a fraud affecting the
documents of a documentary credit in order to paralyze the payment by the bank:
does the bank have an obligation to refuse payment? The Rules do not give us an answer,
court decisions are divided on this point.
***
The Rules of the Supreme Court on certain questions concerning disputes relating to the
documentary credit undoubtedly provides the courts with more precision and certainty
to rule on disputes relating to documentary credits. Nevertheless, we must admit
that it is far from complete and that the UCP in its current version still remains a source
very important law for Chinese courts, and important case law
foreigners also have considerable influence.
(1) Harbottle RD (Mercantile) Ltd. V. National Westminster Bank Ltd., (1978) QB 146, (1977), 2 All. ER862.3 WLR752.
(2) Ch. Gavalda and J. Stoufflet, Banking law: Litec 2005, 6th ed., P. 403.
(3) J. Stoufflet, Documentary credit: Litec 1957.
(4) J.-P. Mattout, International banking law: Bank 2004, 3rd ed., P. 259.
(5) J. Stoufflet, The normative work of the International Chamber of Commerce in the banking field, in Studies offered to Berthold Goldman: Litec, 1987, p. 364 and s.
(6) RUU 500, art. 8
(7) G. Affaki, op. cit., n ° 139.
(8) G. Affaki and J. Stoufflet: Banque et Droit, 2004, n ° 95, P62, obs.
(9) Cass.com. March 4, 1953, S. 1954-1-121, Lescot note
(10) M. Vasseur, notes Cass.com. April 7, 1987, DS 1987, p399
Kenneth WEISSBERG, Lawyer at the Court of Paris; with the support of Xing HU, Graduated from Xiamen University (China) and Paris X and Paris II Universities
Evidence plays an essential role in the proceedings. A right only exists when a
rule of law recognizes this, and that the procedure of this law authorizes the referral of a
jurisdiction to enforce this rule.
There is an important difference between the Chinese procedure and the procedures
western. The distribution of powers in China is not the same as in the countries
westerners. The separation of legislative, executive and judicial powers, which we
known in western countries, does not exist in China, where the judiciary
including that of the Prosecutor's Office, and the executive power depend on the legislative power.
The traditional system of Chinese procedure is inquisitorial: control of the trial is entrusted to the judge who plays an active role. In addition to the elements that the parties will submit to him, the judge may look for evidence himself in order to base his own opinion. However, with the entry into force of the 2008 Code of Civil Procedure, which was inspired by the adversarial system (the justice system which mainly relies on the skills and abilities of the parties' lawyers to defend their version of the facts. ), the admissibility of evidence has become an increasingly important issue.
The Chinese Civil Procedure Code promulgated on April 9, 1991 was amended on October 28, 2007, and came into force on April 1, 2008 (hereinafter referred to as CPCC). In its chapter 6, 12 articles relate to the proof.
The Chinese Criminal Procedure Code promulgated on March 17, 1996 entered into force on January 1, 1997 (hereinafter referred to as CPPC). The evidentiary provisions are in Chapter 5 and have 8 articles.
The Chinese Administrative Procedure Code promulgated on April 4, 1989 entered into force on October 1, 1990, its chapter 5 includes 6 articles concerning the evidence (hereinafter called CPAC).
All these provisions being very abstract and difficult to apply, the Court
Suprême Populaire was based on the experience of the courts and was inspired by
common law and civil law systems, to set out “the provisions on certain
problems in the application of the code of civil procedure1 ”which were published on 6
December 2001, and effective April 1, 2002 (hereinafter referred to as
“2002 provisions”). 2
The purpose of these provisions is to ensure the correct application of the law and to guarantee
citizens exercise their powers.
The first part of this article will concern a general presentation of the legal regime of evidence in China, mainly in civil matters. The second part will consist in analyzing the particularities of evidence in administrative and criminal matters.
Like French law, the burden of proof in China rests with the parties who must prove the facts in support of their claim.
According to article 64 of the CPCC:
It is up to each party to prove the facts necessary for the success of its claim.
If for objective reasons the parties and their principals cannot collect the evidence themselves, when the court considers it necessary for the resolution of the dispute, it must investigate and gather the evidence.The People's Court must investigate and verify the evidence objectively as a whole, in accordance with the procedure prescribed by law.
Article 65 of the CPCC specifies:
the court has the power to investigate legal and natural persons; data subjects have no right to refuse.
The parties have the obligation to prove the damage for which they claim compensation. In principle, the burden of proof rests on the claimant, since the claimant must prove it. Reciprocally, whoever claims to be released must justify the payment or the fact which produced the extinction of his obligation.
According to article 4 of the 2002 Provisions, it is the defendant who must then prove that
the claim of the plaintiff is unfounded. Article 4 lists eight cases
tort, for example with regard to an obligation to make reparation in matters of
environmental pollution, the onus is on the defendant to prove that he benefits from a
exemption provided by law, the absence of the event giving rise to liability, or
the absence of a causal link.
In French law, in civil matters, the judge is passive: the parties must provide the
evidence of their claims and the judge must only assess their relevance. He ... not
can search for new ones itself, or supplement them. However, under Chinese law,
the role of the judge is not passive. It is expressly stated in paragraph 2 of article 64
CPCC, that when the court considers it necessary for the resolution of the
litigation, he must investigate and gather evidence. Article 7 of the 2002 Provisions
provides that, in the absence of a settlement, the court is responsible for determining the
burden of proof in accordance with the principle of equality and the principle of honesty and
of loyalty.
At first, this rule posed a lot of problems, it often happened that the court replaced the parties and collected the evidence for them, which raised the question of the legality and the admissibility of the evidence that the court obtained by exceeding his powers. The law was silent on this issue. Fortunately, with the 2002 Provisions, this issue has been resolved; section 15 has limited to two cases in which the court can gather evidence:
Apart from these two cases, the court can collect evidence at the request of the parties, subject to state or professional secrecy.
The new code of civil procedure defines the modes of proof in a list
limiting in its article 63:
The testimony of the parties knows two cases:
- the parties' explanation of the facts of a case,
- the admission of a party concerning the facts of a case denounced by the other party is admissible, it consists for a person to recognize a fact which is unfavorable to him. It must be emphasized, however, that admitting a fact does not mean consenting to the other party's claim.
The expert report:
expertise is a measure of technical or scientific investigation that a judge entrusts to an expert at the request of the parties. Its purpose is decision support. The request of an expert is both a right for the parties to the proceedings, and an obligation of the burden of proof. The parties have the right to oppose an expert report issued by the expert chosen by the court.
A report by the judge:
The investigation carried out by the judge on the place or on the objects of the litigation, either at the request of the parties, or on his own initiative.
The Chinese Administrative Procedure Code promulgated on April 4, 1989 entered into force on October 1, 1990 (hereinafter CPAC which includes 75 articles in total), its main features are:
The burden of proof in administrative matters lies with the administration (the defendant). The latter must demonstrate concrete administrative behavior within ten days of receipt of the request. On the other hand, the CPAC had not specified the cases of absence of proof on the part of the administrative department or the proof presented after the deadline of ten days without justified reason. The Supreme People's Court explained that in such a case, the concrete administrative behavior in question is considered to be devoid of just cause; this results in the failure of the administrative department. If for an objective reason or in case of force majeure, the defendant does not succeed in establishing the proof, he has the right to request an extension of ten days. During the trial, the defendant cannot collect the evidence of the plaintiff or the witness himself.
Although the FPCC has expressly stated that the burden of proof rests with the defendant, it does not exclude that, where applicable, the burden of proof may lie with the plaintiff. The applicant must then prove:
The principles of evidence in criminal matters are different from those applicable in civil matters.
First, with regard to the distribution of the judicial power, which is defined in article 3 of the Code of Criminal Procedure, the judicial power is divided between the public security organs responsible for the preparatory investigation and the preventive detention. It has the power to take the initiative of public action, and it is responsible for the investigation of all other offenses under the direction of the prosecution; the court assumes the function of judging. Indeed, in the current Chinese system, the investigative bodies have considerable powers, they have the power to decide and execute any investigative measure such as search, seizure, surveillance of residence, liberty under bail, and police custody (except arrest and subsequent detention) without prior authorization from the prosecution or the court.
Next, a large part of the evidence provisions of the Code of Criminal Procedure concern the procedures for obtaining evidence. The other parts, which concern the provisions on the presentation of evidence, the communication of documents, the validity of evidence and the effectiveness of evidence are very difficult to apply directly in practice. This is the reason for the appearance of numerous provisions published by different authorities, for example "The provisions on certain problems in the application of the Code of Criminal Procedure" of January 19, 1998, jointly stated by the Supreme People's Court, the Prosecutor's Office People's Supreme, the Ministry of Public Security, the Ministry of State Security, the Ministry of Justice and the Commission responsible for the legal work of the Standing Committee of the National People's Assembly. These provisions are very numerous and lack coherence between them.
Finally, the appearance as a witness before a court consists on the part of a witness who comes to declare before the court at a hearing what he personally saw or heard, and to be questioned by the parties or his solicitors according to the procedure provided by law. However, this procedure does not work well in practice, and the presence of the witness is a great difficulty. Due to the lack of witness protection provisions, their attendance rate is extremely low; however, testimony is used extensively at the hearing. Article 157 of the Chinese Criminal Procedure Code states: "The testimony of an absent witness must be read aloud in court." As a result, the parties cannot question them and the judge is in a difficult situation to verify the sincerity of this testimony. The consequence is that the hearing remains very formal and loses much of its interest, the judge renders his judgment on the basis of the paper documents which are given to him.
In conclusion, not only in terms of evidence, but also in general, Chinese criminal procedure, even if it has evolved considerably in recent years and has seen much progress, still has a lot of progress to make in order to reach the degree of reliability of western countries.
***
1 Similarly in administrative and criminal matters,
Provisions on certain problems in the application of the code of administrative procedure of June 4, 2002, implemented on October 1, 2002.
Provisions on certain problems in the application of the code of criminal procedure of June 29, 1998, brought into force on September 8, 1998.
2 According to a decision concerning the repeal of the provisions published before the end of 2007 (7th) of the Supreme People's Court of December 8, 2008, articles 136, 205, 206, 240, 253,299 of the provisions of 2002 were deleted due to the modification in 2008 of the CPCC, the part concerning the evidence remains in force.
The new Chinese Penal Code which came into force on October 1, 1997 was revised on February 28
2009 by amendment VII, and the Chinese Criminal Procedure Code promulgated on March 17
1996 entered into force on January 1, 1997. The general provisions of these Codes
specify that the aim is to ensure accuracy in establishing the facts complained of,
the proper application of the law, the punishment of criminals and the protection of persons
innocent in order to safeguard the socialist legal system and guarantee citizens the
protection of human rights, property rights, democratic rights and others
rights, and to ensure public economic and social security and the development of the cause
socialist..
Chinese criminal law applies to offenses committed on the national territory and to
certain offenses committed abroad. The extent of extraterritorial jurisdiction is
determined by the nationality of the offender and the nature of the offense.
In matters of counterfeiting and falsification of money or negotiable securities, corruption, violation of state secrets, use of the false status of civil servant, nationals are always punishable when the acts are committed abroad.
Apart from these cases, nationals can also be prosecuted for acts perpetrated abroad, however they could benefit from an exemption when the maximum penalty provided by Chinese law is less than a sentence of three years of imprisonment.
The Chinese Penal Code only applies to offenses committed by foreigners outside Chinese territory when the alleged acts have harmed the Republic or Chinese nationals, that they are punished by the law of the place of commission, and that the minimum sentence under Chinese law is three years' imprisonment.
Where criminal law has extraterritorial application, national courts have
jurisdiction even when the facts have been tried by a foreign court. But if the trouble
pronounced was executed abroad, Chinese courts have the power either to reduce the
penalty incurred either to pronounce an exemption from penalty.
With regard to the application of criminal law over time, art. 12 of the Criminal Code
enshrines the principle of non-retroactivity of the new law by requiring that the actions
the accused are punished only on condition of being incriminated by the law applicable at the time of the
facts. This principle is mitigated, as in most modern legal systems, by the
retroactivity in mitius which allows any accused to benefit as of right from the application of
provisions of the new sweeter law.
The constituent elements of the offense in Chinese Law are the same as in French Law. We find the requirement of a legal element, a material element and an intentional element.
The intentional element is of great importance in Chinese criminal law because it determines the classification of offenses. Instead of the tripartite classification of French law, only two categories of offenses are known in Chinese law; on the one hand, intentional offenses and on the other hand, unintentional offenses.
Minor offenses equivalent to contraventions according to the French classification, are qualified as “administrative” offenses and do not fall under the jurisdiction of the Courts.
This summary presentation of the Chinese system will be limited to the description of the main
characteristics of Criminal Law and important elements of the applicable procedure.
Chinese Criminal Law is based on a particular conception of the concept of public order and on
a classic responsibility system.
In China the concept of public policy covers both public policy as it is conceived by the
most western countries, and the protection of socialist ideology.
Public order in the traditional sense of the term is protected in China by several categories of offenses including offenses against the personal and democratic rights of citizens, offenses against public security, crimes against property, offenses against public order . Certain acts of civil liability in France are penalized because of the importance accorded to them in Chinese tradition.
This is the case, for example, of cohabitation with the wife of a military member on duty or even the failure to assist needy or sick parents.
There is no provision in the Code that penalizes political crimes or crimes of opinion.
But the protection of the socialist ideology is ensured by the criminalization of acts which threaten the security of the State.
As such, all actions aimed at overthrowing the socialist regime and those which undermine the sovereignty, territorial integrity and security of the People's Republic of China are punished. Articles 102 to 113 of the Penal Code list these acts in a nonlimiting manner, among which are: incitement to desertion, espionage and incitement of the masses to revolt.
Chinese Penal Code Punishes Various Actions for the Protection of Public Order
socialist economy. Among these acts, we find financial fraud, fraud
tax and customs, smuggling and violation of intellectual property rights and
industrial.
Certain perfectly legal economic activities in most modern legal systems can be seen as undermining the socialist economic order.
In 1988, a television import contract, concluded between a French company and a subsidiary of the Chinese ministry of aeronautics apparently competent in the matter, was regarded as a vast fraud damaging the economy of the country.
The commercial agent employed by the French company, who had received a commission and received a large security deposit on behalf of his employer, was imprisoned for smuggling and embezzlement.
He was facing capital punishment because, being of Chinese nationality, he could not benefit from the preferential treatment reserved for expatriates. The Chinese authorities who participated in the signing of the contract were dismissed from their posts and also imprisoned for smuggling. The French company was not worried, and the commercial transaction was not called into question towards him.
Criminal responsibility and the sanctions imposed depend on the personality of the
offender and the seriousness of the facts.
In China, the criminal majority is fixed at 16 years.
However, minors under the age of 14 are punishable for certain offenses considered as seriously undermining public order, such as intentional homicide, serious injury, rape and drug trafficking, etc.
The penalties incurred are then lower than those provided by law. The deaf-mute and blind also benefit from this reduction.
As in most legal systems, the mentally ill who have not had
awareness of the scope of their actions is criminally irresponsible.
Likewise, force majeure and self-defense are exempt from liability.
In any event, art. 3 of the Penal Code provides that unintentional offenses do not
are punishable only in cases provided by law.
Most unintentional offenses are punished, but the penalties are much less.
For example, in the case of intentional homicide, the penalty incurred is death, life imprisonment or imprisonment which cannot be less than 10 years. If extenuating circumstances are accepted, the penalty ranges from 10 years' imprisonment to 3 years (article 232 of the penal code). On the other hand when the homicide is involuntary the penalty goes from 3 to 7 years of imprisonment. If extenuating circumstances are
retained, the penalty ranges from 3 years to 6 months of imprisonment (article 233 and 45 of the Penal Code)
For any offense, the accused can benefit from extenuating circumstances, the main cause
mitigation or even exemption from punishment in the case of a minor offense being surrender
voluntary.
The Chinese Penal Code provides for five main and three accessory penalties.
The main penalties are as follows:
(i) being placed under surveillance for three months to two years, a non-custodial sentence which obliges the convicted person to submit reports on his activities and
obtain authorization for all travel;
(ii) detention from one month to 6 months, which takes place in a detention house where the convicted person is gainfully employed;
(iii) imprisonment from 6 months to 15 years;
(iv) life imprisonment;
(v) the death penalty which has been incurred since 1982 for economic offenses.
It can be suspended for two years, during which time the offender benefits from “reformation through work” and can, if he commits no other voluntary crime, obtain that his sentence be commuted to one life sentence or term of 15 to 20 years.
The People's Courts may, on an ancillary basis, pronounce either a fine or the deprivation of political rights for a period of one to five years, or even the total or partial confiscation of property.
The judicial power is distributed by art. 3 of the Code of Criminal Procedure between the organs of
public security responsible for the preparatory investigation and preventive detention, the
public prosecutor's offices which approve the arrest, control its legality and implement
public action, and the Courts. We will only discuss the provisions relating to
arrest and detention and the guidelines for the trial.
The public security organ wishing to make an arrest must obtain authorization from the Court or the Prosecutor's Office.
In case of refusal, he can request a review.
It is also the only power it has when the prosecution refuses to initiate criminal proceedings following a preliminary investigation.
In an emergency, the public security organ can detain people caught in the act or suspected of serious crimes, without having been authorized to do so.
In this case, he must inform the prosecution within three days and if the latter does not authorize the arrest, within three days, the detained person must be immediately released.
Detention during the preliminary inquiry cannot exceed two months. If the investigation cannot
be closed at the end of this period, the Public Prosecutor's Office may grant an additional period of one month.
This was the case in the above-mentioned import contract case.
The commercial agent was detained for 12 months without any charges being brought by the People's Court. A first indictment for embezzlement was transmitted to the Court after 4 months of detention. After the Tribunal dismissed it for insufficient evidence, a new charge was brought 3 months later.
Despite the dismissal of this second charge, only a release "under medical care guarantee" was obtained 5 months later. This release was made possible due to the acquisition of French nationality by the detainee in his capacity as spouse of a French national.
All accused must be notified of the indictment no later than ten days before the date of the hearing.
The right to defense is affirmed by the Code of Criminal Procedure, moreover the law of 2001 and 2008 concerning the exercise of the legal profession reaffirmed and strengthened the rights of lawyers in criminal procedure to ensure the criminal defense of their customer.
The criminal proceedings are adversarial, the debate taking place between the accused, the prosecutor and
possibly the civil party. Usual modes of evidence are recognized and the accused's confession
alone does not have probative value. Magnetic recordings, which are widely used
common in China, have probative value even when done without the knowledge of
the contact.
The presumption of innocence is not recognized by the Code of Criminal Procedure. The defender
of the accused has the power to provide evidence in order to have his innocence recognized.
In practice, counsel for the accused are often appointed by the Tribunal. They have for
mission to encourage their "client" to recognize the facts in order to facilitate the manifestation of
truth and benefit from the indulgence of judges.
In any event, when the judges deliberate at a sitting, they have the obligation to
communicate the judgment to the parties within five days. However, when the decision is
referred to a later hearing, copies of judgment to be issued to parties
straight session. The time limit for appeal starts only from the reception of the judgment.
Notwithstanding the relative independence of judges vis-à-vis the Prosecutor's Office, experience has shown that in matters of economic crimes, it is difficult for the accused to establish their good faith.
It is therefore strongly recommended that Western companies handling cases involving considerable sums of money ensure the legality of the transactions envisaged, especially when they use national intermediaries.
Legal consultation from one of the major Chinese business firms in the market is therefore an imperative requirement, prior to the conclusion of any agreement.
For the past ten years we have witnessed an important debate on offenses relating to state security, criminal business law, capital punishment and the rights of the accused in criminal proceedings, all these debates have had certain positive consequences for criminal law legislation.
It is therefore important to note that Chinese criminal law has evolved considerably and has seen a lot of progress, one can only hope that it will meet both the requirements of China's social development and those of international trade.