The State-owned Assets Supervision and Administration Commission ("SASAC") of the State Council has recently issued the Guidelines on Compliance Management for Central State-owned Enterprises (for Trial Implementation) (the "Guidelines"), immediately effective from the date of issuance.
The Guidelines clarify the respective compliance management responsibilities of the board of directors, the board of supervisors and the management level of a central state-owned enterprise, and propose that a central state-owned enterprise shall set up a compliance committee which will work in the same office with the enterprise's leadership group for rule-of-law development or risk control committee and jointly undertake the organization, leadership, overall planning and coordination of efforts in compliance management, the convening of regular conferences to discuss and decide on major affairs concerning compliance management or give comments and proposals in this regard, and the guidance on, supervision of and assessment of the work on compliance management. Meanwhile, the Guidelines require that, a central state-owned enterprise shall strengthen the compliance management of its overseas investment and business activities by conducting in-depth research into laws and regulations of the investment destination countries and into relevant international rules to gain a comprehensive understanding of provisions for prohibited activities and also a clear picture of the warning line and the bottom line for overseas investment and business activities, improving its bylaws, systems and procedures in respect of overseas compliant business operations and paying great attention to the research into the compliance of proposed projects and to the due diligence thereof to strengthen the management and control of overseas institutions in accordance with the law and standardize operating management practices, etc.