The Ministry of Commerce of the PRC ("MOFCOM") issued the Guidelines on the Antitrust Filing in the Acquisition of Domestic Enterprises by Foreign Investors on March 8, 2007 ("New Guidelines"), which amended and superseded an early version of such guidelines issues by MOFCOM on May 8, 2006. The New Guidelines elaborates the relevant rules regarding antitrust filing by foreign investors prior to its acquisition of domestic enterprises set out in the Provisions on the Acquisition of Domestic terprises by Foreign Investors ("M&A Rules") which is currently in effect, by providing further details with respect to filing party(ies), filing documents, filing procedure and time limitation of the antitrust filing.

Whereas the purpose of the New Guidelines is to give instructions on pre-acquisition antitrust filing to investors, the following aspects in the New Guidelines are worth notice:

1. Filing Party(ies)

Different from provisions in the M&A Rules mentioned above, the New Guidelines regulate that “In principle the filing party should be the acquiring party, but under certain specific circumstances, it could also be the target.” Due to the purpose of the New Guidelines is to give some practical instructions to the filing parties rather than to make any substantial amendments to the M&A Rules, we therefore understand that the filing party shall be the acquiring party and the target company has no obligation to make such filing.

2. Filing Time

Consistent with the M&A Rules and differentiating the required filing time of the onshore acquisitions and that of offshore acquisitions, the New Guidelines regulate “Antitrust filing should be made before the acquisition plan is publicly announced. An antitrust filing for an offshore acquisition should be made before the acquisition plan is publicly announced or at the same time when the acquisition is filed for antitrust
review with the competent authorities of its home jurisdiction”

3. Filing Materials

The New Guidelines itemize the requested documents in detail (totally 19 items). Compared with the early requirements, it is to be noted that:

(1) MOFCOM makes the requirement in the New Guidelines for the first time that where the acquiring party is a foreign investor, the foreign filing party shall also submit otarization and legalization documents prepared by its local notarization agency.

(2) In respect of the analysis of competition status on relevant market, MOFCOM recommends the filing party provide an analysis of competition status on relevant market from various economic and technical perspectives, including but without limitation market entry analysis, analysis regarding horizontal or vertical cooperation between operators in the relevant market etc.

(3) The New Guidelines also require that the filing party must submit statements regarding the authenticity of the filing information and/or the accuracy of the source of information signed by the parties and/or by their agents.

4. Review Period

The New Guidelines regulate that, normally, “The review period is 30 working days commencing from the date on which the authorities receive the complete filing documents.” However, the New Guidelines also provides that “If the filing party has received notification of extension, the review period would be extended to the 90th working day” (from the first filing date). Within the extension period, “The filing party should provide additional information or explanations according to the requirement of the notification.”

5. Pre-filing Consultation

In practice, the Anti-monopoly Investigation Office (“AIO”) under MOFCOM, which is in charge of antitrust filling, would orally request to have conversation with filing party prior to the official submission. The New Guidelines confirmed such practice by encouraging filing party and its agent, prior to the formal filing, to hold informal consultation with AIO to discuss major issues such as the necessity of filing and the definition of the relevant market. At the same time, the New Guidelines recommend that the applicant for the consultation should prepare the relevant materials for the consultation, including introduction for the background of the transaction, general description of the relevant industries and markets, and the transaction's potential impacts on market competition. Such provision confirms the importance of the pre-filing consultation.