(“Measures”) ( 境 外 投 资 项 目 核 准 和 备 案 管 理 办 法 ) , issued by the National  Development and Reform Commission (“NDRC”)

As announced in our Legal Flash of January 2014, the NDRC enacted the  Catalogue of Investment Projects Approved by Government (2013 edition) (“Catalogue”), to facilitate governmental approval of inbound and outbound  investment projects.

Based on the principles established in the Catalogue for simplifying the approval  procedure on outbound investment projects (the “Projects”), the NDRC enacted the Measures to introduce the new framework:

Verification regime

  • The Measures narrow the scope of Projects subject to the verification  process, so most Projects will be exempt from verification process, except:
  1. Projects with a Chinese investment exceeding USD 1 billion (“Major  Projects”); and
  2. Projects involving sensitive countries and regions, including countries  that have not established diplomatic relations with China, countries  subject to international sanctions, and countries or regions affected by  wars or civil strife. Also, Projects involving sensitive industries,  including basic telecommunications operations, crossborder  development and use of water resources, large-scale land  development, main power transmission lines and power grids, news  media and other industries (“Sensitive Projects”) are exempt.
  • The NDRC is responsible for verifying most Major Projects and Sensitive  Projects, except those with a Chinese investment exceeding USD 2 billion  that involve either sensitive countries and regions or  sensitive industries,  which are subject to State Council approval.

Record-filing regime

Apart from Major Projects and Sensitive Projects, other Projects are only subject  to a record-filing process with the applicable authorities:

  • Projects carried out by  enterprises under central management, and  outbound investment projects carried out by local enterprises with a  Chinese investment exceeding USD 300 million will be subject to the  NDRC’s record-filing regime.
  • Projects carried out by local enterprises with a Chinese investment below  USD 300 million will be subject to record-filing by the provincial governments’ relevant investment departments.

Pre-work report 

Under the Measures, investors in overseas acquisitions or bidding projects must  submit a report to the NDRC and obtain its confirmation before carrying out  substantive work. The threshold for trigging this requirement has been increased  from the USD 100 million to USD 300 million.

Time limit for verification process

The Measures give a clear timeframe for the verification process:

  • Where a Project qualifies for verification, the NDRC must complete the  verification within 20 working days of accepting the project application  report, or put forward review opinions and submit them to the State  Council for verification and approval. If the NDRC is unable to decide on  verification within this time limit, an extension of 10 working days is  allowed.
  • Where necessary, the NDRC must assign a qualified consulting agency to  conduct an assessment within five working days of accepting the Project.  The time period for assessment, which is not regarded the processing  period for verification, must not exceed 40 working days in general.

Date of issue: April 28, 2014. Date of effectiveness: May 8, 2014.