On 27 December 2016, the Standing Committee of National People's Congress (NPC) issued the draft E-commerce Law for public opinion.
The draft E-commerce Law can be briefly summarized as follows:
• The draft E-commerce Law shall apply to e-commerce activities which occur within the territory of the People's Republic of China and e-commerce activities involving domestic e-commerce business entities or consumers.
• The definition of e-commerce refers to business activities in which goods or services are traded through information networks such as the Internet. However, financial products and services, the use of information networks to broadcast audio and video programs and web content services, including network publishing services, are not subject to the draft E-commerce Law. Where laws and administrative regulations contain provisions governing goods and services transactions, such provisions shall apply.
• E-commerce business entities, including third-party e-commerce platforms and e-commerce operators, shall apply for business registration in accordance with the law. Business registration is not required for e-commerce business entities involved in (a) the provision of personal services, cottage industries, and the sale of self-produced agricultural products for which it is unnecessary to obtain licenses; and (b) other industries where industrial or commercial registration is not required in accordance with the law.
• E-commerce business entities are responsible for ensuring that they are carrying out their businesses in accordance with the law. In particular, they shall ensure that relevant licenses are obtained, when necessary.
• Third-party e-commerce platforms are responsible for verifying the identity and administrative licenses, as well as registering the businesses, of e-commerce business entities using their platforms. Such information should be verified and updated by third party platforms on a regular basis.
• Third-party e-commerce platforms shall formulate platform service agreements and transaction rules which clearly delineate the rights and obligations of each party. The platform operators shall prominently display these terms on their respective platforms for the benefit of e-commerce operators and consumers. Third-party e-commerce platforms are also required to make records of their platform service agreements and transaction rules with the relevant government agencies.
• Electronic contracts and electronic payments are allowed, and subject to the relevant requirements stipulated by the draft E-commerce Law. In the absence of provisions in the draft E-commerce Law, the provisions in Contract Law and Electronic Signature Law shall apply. E-commerce business entities are responsible for establishing and improving their internal control system and technical management measures in order to prevent information leakage, loss, damage, and to ensure the safety of e-commerce data and information.
• E-commerce business entities are responsible for protecting intellectual property rights and consumers' interests. In a product quality case, where a third party e-commerce platform cannot provide e-commerce operator's real name, address and other contact information to consumers, consumers may seek compensation from the third party e-commerce platform.
• The relevant import and export government agencies shall establish a coordinated system dealing with cross-border e-commerce customs clearance, taxation, inspection and quarantine, in order to promote the construction of a single-window system, realize information sharing and mutual supervision, improve customs clearance efficiency, protect trade safety and improve trade facilitation.
• The government shall promote the digitalization of cross-border e-commerce related import and export declarations, tax payments, and inspection and quarantine processes. Electronic documents, such as electronic lists and electronic tax bills will have the same legal effect as paper documents.
• Where an e-commerce business entity violates the provisions in the E-commerce Law, the relevant government agencies may impose a warning or a fine (ranging from CNY 30,000 to CNY 500,000) on the entity, order the entity to make rectifications, or suspend or revoke the business license.