China's national security review procedures commence - 10 March 2011

On 5 March 2011, China's Ministry of Commerce (MOFCOM) introduced new trial procedures under China's national security review regime, which requires foreign investors to obtain prior approval before acquiring control of domestic Chinese companies in certain sensitive sectors. MOFCOM is currently seeking comments on such trial procedures before 10 April 2011.

Background

Just prior to the effective date of the State Council's Notice on the Establishment of the Security Review System in M&As of Domestic Enterprises by Foreign Investors (Guo Ban Fa [2011] No. 6) (Rules) (discussed in our alert 16 February 2011), MOFCOM issued corresponding implementing provisions entitled the Interim Provisions on Issues Relating to Implementing the Security Review System for Foreign Investors' Merger with and Acquisition of Domestic Enterprises (Interim Provisions.