Expertise/Russia–China Practice
Service
In projects with a Chinese party, a company complies with restrictive measures, currency control requirements, anti-corruption rules and data transfer rules, and answers banks' questions about transactions.
We are most often instructed by:
The information on this website is provided for information purposes only and does not constitute a public offer.
Timing and fees are indicative and are confirmed when the engagement is agreed.
Compliance procedures, including sanctions compliance, are structured differently for a company with Chinese participation and for a Russian company.
A company with Chinese participation operating in Russia receives a list of the applicable requirements, a procedure for checking Russian counterparties, a procedure for payments with the Chinese participant and the banks, internal documents and a procedure for handling requests. The focus is on banks' questions about the participants and ultimate owners, the source of funds and the nature of transactions: the ability to make payments depends on the answers. A set of explanations is prepared before payments begin and is kept up to date.
A Russian company buying products from Chinese suppliers or selling goods to China receives a procedure for checking counterparties and routes, clauses on restrictions and change of circumstances, and a procedure for dealing with currency control requirements and bank requests.
The outcome of the service is the work performed within the scope agreed with the client.
Acting for the Chinese company
Challenge
A Chinese and a Russian partner were setting up a joint venture, and they had different legal traditions, expectations regarding management and views on the allocation of control.
What was done
The Chinese company was advised on the ownership structure, the management and exit mechanics, and the alignment of the parties' interests under Chinese and Russian law. The venture was launched on the agreed terms.
Parent company due diligence
Challenge
A Russian buyer was acquiring a Russian company whose parent was a Chinese company. Closing the transaction required due diligence of the Chinese parent company and its connection with the asset being sold.
What was done
Legal due diligence of the Chinese parent company was carried out, covering the group's corporate structure, the chain of ownership of the Russian subsidiary and the legal risks at the intersection of Chinese and Russian law. The acquisition of the Russian company went ahead with a legal picture that was clear to the parties.
Legal due diligence
Challenge
Independent legal due diligence of a Chinese company was required, covering its corporate structure and legal status at the intersection of Chinese and international law.
What was done
An opinion was prepared on the corporate structure, the chain of ownership and the related legal risks. The client obtained a clear legal picture for its further decisions.
Contract review
Challenge
Contracts for the international sale of goods between China and Russia carry risks of divergence in the governing law, delivery terms and dispute resolution mechanisms. Such contracts were reviewed on behalf of the Chinese company.
What was done
The governing law, delivery terms (Incoterms), currency and tax aspects and the dispute resolution procedure were analysed. The risks were identified and eliminated before signing.
With an assessment of the actual position: the participants, counterparties, shipment and payment routes, the structures used and the transactions carried out. Internal documents are prepared after this assessment: documents unconnected with the company's actual operations do not reduce risk.
The scope of the check depends on the nature and amount of the transaction: status and authority, owners and ultimate owners, whether restrictions apply to the company itself and to the products, financial position and court cases. The result is set out in a document that records the check carried out and may be used to demonstrate due care in choosing the counterparty.
First, the reason is established: more often insufficient documents or questions about the ownership or the nature of the transaction, less often the applicability of restrictions. Explanations and supporting documents are then prepared and, where necessary, the payment arrangements are changed. No assistance is provided in circumventing restrictions or in providing incomplete or inaccurate information to a bank.
Such mechanisms are assessed case by case: permissibility under the applicable requirements, evidence of the basis for payment, and how they are reflected in the contract and in the documents for the bank. Options that conceal the substance of a transaction are neither proposed nor supported.
The subject of the request and the scope of information are determined, supporting documents are gathered, explanations are prepared and the correspondence is recorded. The documents that matter are those drawn up at the time of the transaction, and the procedure for keeping them is determined in advance.
An hourly rate, a fixed fee or a combined model is used; in some cases part of the fee depends on the outcome achieved. The fee is determined by the time actually spent, the complexity of the matter and the overall timeframe of the project, and is agreed before work begins.
Describe your matter and the circumstances in which it arose. The consultation establishes the possible structure of the work and the scope of legal support required.
