NPCSC Session Watch: Separate Parts of Civil Code, Tax Bills, Criminal Procedure, and More

The Council of Chairmen met on August 17 and decided that the 13th NPC Standing Committee (NPCSC) will meet for its fifth session from August 27 to 31. The session will consider at least seven legislative bills, including the much-anticipated draft Separate Parts of China’s first Civil Code, draft E-Commerce Law, and three tax bills. As usual, below we take a look at the legislative bills on the session’s agenda.

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Tracking China’s Progress Towards Law-Based Taxation

China currently collects 18 types of taxes. They will generate an estimated total of 8 trillion RMB in revenue for the Central Government in 2018. But only six of them—providing only about a third of the central tax revenue—are imposed by laws (法律) enacted by the legislature, the NPC or its Standing Committee (NPCSC). The rest are governed only by interim regulations (暂行条例) adopted by the State Council—the Central Government itself. The enormous taxing power the State Council now wields was in fact granted by the NPC in 1984. Now, over three decades later, the NPC is reclaiming that power by gradually elevating the interim regulations into laws, with an eye to complete the process by 2020. In this post, we will explain why the NPC made the power grant in the first place and discuss what it has recently been doing to reassert its control over taxation.

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NPC Calendar: August 2018

August 1 is the tenth anniversary of the entry into force of the Anti-Monopoly Law (反垄断法).

The 13th NPC Standing Committee (NPCSC) is expected to convene for its fifth session later this month. The Council of Chairmen is expected to meet in mid-August to decide on the dates and agenda of the session.

The following draft laws have been tentatively scheduled for this upcoming session according to the NPCSC’s 2018 legislative plan:

It is possible that the draft amendment to the Criminal Procedure Law (刑事诉讼法) would be submitted for another round of deliberation as well.

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Draft Amendment to Individual Income Tax Law Facing Resistance in NPCSC

In his 2018 Government Work Report, Premier Li Keqiang vowed to “raise the [individual] income tax threshold and create expense deductions for items like children’s education and treatment for serious diseases.” Fulfillment of this promise primarily falls on the Ministry of Finance (MOF) and the State Administration of Taxation (SAT), which managed to draft an amendment to the Individual Income Tax Law and submitted it to the NPC Standing Committee (NPCSC) in under three months. But the bill did not fare particularly well in the NPCSC. According to reports by Caixin and the Legal Daily, legislators questioned certain main provisions of the draft amendment during group deliberations. Before turning to their opinions, we will first introduce the main content of the draft amendment below.

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NPC Calendar: July 2018 (UPDATED)

UPDATE (July 1, 2018): This post has been updated with information from this news release. We will not separately report on the NPCSC’s special session this month unless the resolution contains especially newsworthy content.

The Tobacco Leaf Tax Law (烟叶税法), Vessel Tonnage Tax Law (船舶吨税法), revised Specialized Farmers’ Cooperatives Law (农民专业合作社法), and Decision on the Exercise of Maritime Rights Protection and Law Enforcement Authority by the China Coast Guard (关于中国海警局行使海上维权执法职权的决定; see this post for details) take effect on July 1.

The NPC Standing Committee (NPCSC) is currently soliciting public comments on the following bills through July 28, 2018 (see this post for details):

The NPCSC will convene a special session on July 9–10 to hear a report on inspecting the enforcement of the Atmospheric Pollution Prevention and Control Law (大气污染防治法). In conjunction with hearing the report, the NPCSC will conduct a special inquiry (专题询问) (which senior State Council officials are expected to attend to answer questions) and adopt a resolution related to one of the Communist Party’s three ongoing “tough battles” (攻坚战): preventing and controlling pollution.

The NPCSC’s next regular session will take place in late August.

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NPCSC Solicits Public Comments on Four Draft Laws: June 28, 2018

UPDATE (Jun. 28, 2018): The deadline has been updated per newest information on the NPC’s website.

The NPC Standing Committee (NPCSC) is now soliciting public comments on the following four draft laws through July 28, 2018:

  1. draft amendment to Individual Income Tax Law 个人所得税法修正案草案 (Summary)
  2. second draft revision to People’s Courts Organic Law 人民法院组织法修订草案二次审议稿 (English)
  3. second draft revision to People’s Procuratorates Organic Law 人民检察院组织法修订草案二次审议稿 (English)
  4. third draft of E-Commerce Law 电子商务法草案三次审议稿 (English)

All linked files are PDF documents in Chinese. English translations are either completed or underway at the links provided above. The accompanying explanations of these drafts can be read here (PDF).

To submit comments online, please refer to these instructions. The “Occupations” dropdown lists for draft revisions to the People’s Courts Organic Law and the People’s Procuratorates Organic Law include these items, from top to bottom: court staff (法院工作人员), procuratorate staff (检察院工作人员), staff of other state institutions (其他国家机关工作人员), lawyers (律师), and other personnel (其他人员).

Comments can also be mailed to the NPCSC Legislative Affairs Commission (全国人大常委会法制工作委员会) at the following address:

Chinese: 北京市西城区前门西大街1号 邮编:100805
English: No. 1 West Qianmen Avenue, Xicheng District, Beijing 100805

Please clearly write “[BILL NAME IN CHINESE]征求意见” on the envelope.

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Scholarship Highlight: The NPCSC Legislative Affairs Commission and Its “Invisible Legislators”

The Legislative Affairs Commission (LAC; 法制工作委员会) under the NPC Standing Committee (NPCSC) is such a unique institution that one can hardly find an equivalent in another country’s legislature. Consisting mostly of unelected and unidentified members, the LAC works in secrecy, making all decisions behind closed doors. In fact, there is not even a website detailing its functions and organizational structure. The LAC’s employees outnumber NPCSC members, and unlike the latter cohort, they all work full-time and include more legal experts than the staff of any other NPC body (Lu 2013). Their decisions play significant roles throughout the legislative process, from the agenda-setting stage to deliberations—and even after laws are enacted. One Chinese scholar thus aptly dubs the LAC staff “invisible legislators” (隐形立法者) (Lu 2013, p. 74). Some even worry that they may have usurped the powers of elected NPCSC members, thus becoming de facto legislators (Chu 2017).

Here in the third installment of Scholarship Highlight, we provide an overview of the LAC—an essential yet peculiar institution under the NPCSC—and its roles in the legislative process.

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NPCSC Defers Vote on E-Commerce Law, Grants Law Enforcement Powers to Military-Controlled Coast Guard

The 13th NPC Standing Committee (NPCSC) concluded its third bimonthly session on Friday (June 22) without adopting any legislative bills, including the draft E-Commerce Law that it had already reviewed three times (this session included). Several new provisions in the latest draft have sparked heated discussion during the session and could potentially further delay passage of the law. The session did adopt a decision granting law enforcement powers to the now-militarized China Coast Guard, the details of which will be discussed below.

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Scholarship Highlight: Haste and Delay in the Chinese Legislative System

Professor Rory Truex of Princeton University has kindly permitted me to publish the abstract of his recent article, Authoritarian Gridlock? Understanding Delay in the Chinese Legislative System, as the second part of this Blog’s Scholarship Highlight series, which surveys academic scholarship relating to the NPC. This article will appear in a future print issue of the Comparative Legal Studies and is now available online at this link (subscription required). [Disclosure: I provided research assistance to Rory on this article.]

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NPCSC Session Watch: E-Commerce Law, Judicial Reform & Militarized China Coast Guard (UPDATED)

UPDATE (June 19, 2018): On Tuesday (June 19), it was revealed that the State Council  had submitted a draft amendment to the Individual Income Tax Law (个人所得税法) to the ongoing NPCSC session. This amendment came as a surprise because it was only a preparatory project in the NPCSC’s 2018 legislative plan. State media on Tuesday also released the Ministry of Finance’s explanation of the draft amendment. We expect to publish a summary of the draft after it is released for public comments.

In addition, the NPCSC will not vote on the E-Commerce Law at the end of the current session. We thus expect it to return for a fourth and final round of deliberation by the end of 2018, likely in August or October.

The Council of Chairmen decided on Monday (June 11) that the next NPC Standing Committee (NPCSC) session will take place from June 19 to 22. The session will consider three draft laws and two potentially significant draft decisions. A rundown of the agenda follows.

Continue reading “NPCSC Session Watch: E-Commerce Law, Judicial Reform & Militarized China Coast Guard (UPDATED)”