REGULATORY RISK IN ASIA

REGULATORY RISK IN ASIAAn overview of our practice

REGULATORY COMPLIANCE NEEDS TO BE AT THE TOP OF YOUR BUSINESS AGENDA

A regulatory crisis invariably raises a host of issues for a business, be it in terms of the demands on management time, of dealing with language and cultural sensitivities, of the need to act swiftly to protect employees’ and shareholders’ confidence or of managing the publicity surrounding the event.

At DLA Piper, we have dedicated regulatory teams across Australasia, the Middle East, Europe and the United States, allowing us to manage successfully your compliance needs, enforcement action and regulatory risk across multiple jurisdictions. We are the only law firm being able to provide coordinated and comprehensive advice on a local, regional, national and international basis virtually across the globe. DLA Piper’s global team includes former prosecutors and regulators in Asia, Europe and the US, as well as partners from major accountancy firms.

In Asia, our Regulatory Group draws on the expertise of specialist lawyers who are on-the-ground in various Asian jurisdictions. This enables us to assist our clients on all aspects of the Asian regulatory universe from the preventive (eg advising generally on competition and other regulatory matters; conducting effective anti-bribery due diligence in major acquisitions, etc) to the remedial (eg assisting in dealing with government authorities; managing large-scale cross-border investigations, etc).

In addition, our wide range of expertise minimises disruptions to your business since our people can identify quickly the relevant issues and guide you efficiently through the process of resolving them.

Our Group has handled matters involving the following authorities:

Hong Kong: Commercial Crime Bureau (CCB); the Independent Commission Against Corruption (ICAC); Securities and Futures Commission (SFC); the Hong Kong Monetary Authority (HKMA); the Food, Environmental & Hygiene Department (FEHD); the Department of Health (DOH); and the Inland Revenue Department (IRD).

China: Ministry of Finance; State Administration of Industry and Commerce (SAIC); Ministry of Commerce (MOFCOM); State Administration of Taxation; the General Administration of Customs; the National Development and Reform Commission (NDRC); the State Encryption Management Committee; the Certification and

Accreditation Administration; the Ministry of Information Technology (MIT); the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ); the National Standardization Administration of the People’s Republic of China; the China Banking Regulatory Commission (CBRC); and the China Insurance Regulatory Committee (CIRC).

Thailand: Office of Insurance Commission (OIC); Securities and Exchange Commission (SEC); Police Crime Bureau; National Anti-Corruption Commission (NACC); Department of Special Investigation (DSI); Revenue Department; and Office of Consumer Protection Board (OCPB).

Others: Korea Fair Trade Commission; Japan Fair Trade Commission; US Department of Justice; UK Serious Fraud Office; UK Financial Services Authority; and European Commission.

Languages spoken by members of our Group include:

English, French, Italian, Cantonese, Mandarin, Malay, Bahasa Indonesia, Korean, Japanese, Thai, Vietnamese.

OUR EXPERTISE

Corporate Crime and Investigation ■

Financial Services ■

Competition, Customs and Trade ■

Data Protection ■

Safety, Health and Environment ■

Tax Investigations and Disputes ■

Regulatory risk in Asia

PROTECTING YOUR BUSINESS AND YOUR REPUTATION

ABOUT US

From the quality of our legal advice and business insight to the efficiency of our legal teams, we believe that when it comes to the way we serve and interact with our clients, everything matters.

DLA Piper is a global legal services provider with lawyers across Asia, Europe, the Middle East and the United States.

FOR MORE INFORMATION

If you would like further information, please contact:

Christopher ClarkePartner T +852 2103 0688 M +852 9368 3644 [email protected]

DLA PIPER OFFICESAUSTRALIABrisbaneCanberraMelbournePerthSydneyAUSTRIAViennaBAHRAINManamaBELGIUMAntwerpBrusselsCHINABeijingHong KongShanghaiCZECH REPUBLICPragueFRANCEParis

GEORGIATbilisiGERMANYBerlinCologneFrankfurtHamburgMunichHUNGARYBudapestITALYMilanRomeJAPANTokyoKUWAITKuwait CityMEXICOMexico CityNETHERLANDSAmsterdam

NORWAYOsloOMANMuscatPOLANDWarsawQATARDohaROMANIABucharestRUSSIAMoscowSt. PetersburgSAUDI ARABIARiyadhSINGAPORESingaporeSLOVAK REPUBLICBratislava

SPAINMadridTHAILANDBangkokTURKEYIstanbulUKRAINEKyivUNITED ARAB EMIRATESAbu DhabiDubaiUNITED KINGDOMBirminghamEdinburghGlasgowLeedsLiverpoolLondonManchesterShef�eld

SOUTH AFRICACape TownJohannesburg SWEDENStockholmTANZANIADar es SalaamMwanzaVENEZUELACaracasZAMBIALusaka

UNITED STATESAtlantaAustinBaltimoreBostonChicagoDallasDelawareHoustonLos AngelesMiamiMinneapolisNew JerseyNew YorkNorthern VirginiaPhiladelphiaPhoenixRaleighSacramentoSan DiegoSan FranciscoSeattleSilicon ValleyTampaWashington, DC

GROUP FIRMSBOSNIA-HERZEGOVINASarajevoCROATIAZagrebEGYPTCairoGHANAAccraKENYANairobiNEW ZEALANDAuckland Wellington

FOCUS FIRMSDENMARKCopenhagenIRELANDDublinMONGOLIAUlaanbaatarPORTUGALLisbon

PREFERRED FIRMSBRAZILRio de JaneiroSão PauloTURKEYAnkaraIstanbul

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DLA Piper is a global law firm operating through various separate and distinct legal entities. Further details of these entities can be found at www.dlapiper.com.

A list of offices can be found at www.dlapiper.com

In the People’s Republic of China, we are restricted for regulatory reasons (as are all international law firms) from practising local law. This means we work with local law firms if a matter needs advice on local law (e.g. the production of local law legal opinions).

In Singapore, we are restricted for regulatory reasons (as are most international/foreign registered law firms) from practising local law. This means that if a matter needs advice on any Singapore law issues we will arrange for this advice to be provided and issued by a separate local law firm.

Copyright © 2012 DLA Piper. All rights reserved. | APR12 | 1926258

www.dlapiper.com DLA Piper asia llp

AREAS OF EXPERTISE INCLUDE

Acting for the Audit Committee or the Board of directors ■

to carry out independent internal investigations or to manage investigations by authorities

“Rapid Response”, our crisis management service in ■

the form of hotline service available 24 hours a day, everyday of the year. In an urgent situation anywhere in Asia (say, a raid by regulatory authorities of your factory in Malaysia), we can provide you with immediate advice on the telephone on your rights and obligations as well as mobilise quickly a team of regulatory lawyers and public relations specialists to assist you in dealing with the matter

Designing compliance programs for multinational ■

corporations and conducting staff training

Conducting compliance risk assessments to assist in ■

identifying weaknesses in internal controls and how to correct them

Working with US colleagues in conducting internal ■

investigations with potential FCPA implications

Examples of our work in Asia

Conducting FCPA investigations in Japan, Korea, ■

Indonesia, Thailand, China and Taiwan for a US pharmaceutical company

Advising a Japanese trading house in connection with ■

an investigation involving the Independent Commission Against Corruption (ICAC) and the Hong Kong Prevention of Bribery Ordinance

Acting for a US company to conduct compliance risk ■

assessments of its business in markets such as Japan, China, Indonesia, Korea, Thailand

Conducting an international investigation in China, ■

Hong Kong, Nigeria, Japan for a Japanese company under investigation by the Hong Kong ICAC concerning allegations of bribery and corruption

Representing a major US telecom provider on an ■

investigation into the alleged misappropriation of USD 100m in a Thai telecommunications operator (the investigation involved Thailand, Hong Kong, Japan and Africa)

It is essential that investigations be managed by a specialist legal team with hands-on experience and knowledge of the local and international legal environment. Our Corporate Investigations and Compliance team includes former prosecutors and white-collar specialists. We work with our colleagues in the US and Europe to provide a truly international coverage.

INvESTIGATION IN ASIACORPORATE CRIME AND

Advising a German corporation under investigation ■

by Hong Kong’s Commercial Crime Bureau

Acting for a major US bank involved in litigation ■

relating to a letter of credit fraud

Advising a major accounting firm in connection with a ■

police enquiry under the Drug Trafficking (Recovery of Proceeds) Ordinance

Advising a major US multinational in connection ■

with alleged breaches of PRC Customs and SAFE regulations and the prosecution of its Managing Director in the PRC

Advising a Greek bank in connection with multiple claims ■

in various jurisdictions following a USD 200 million fraud and advising on asset tracing and seizure

Advising ACE IN A HOLDINGS INC. in relation to ■

a full compliance investigation into and report on the affairs of ACE Life Assurance Co., Ltd. Advice was provided by DLA Piper’s Bangkok office.

Acting as its retained legal counsel for Ningbo Xingye ■

Electronic Copper Co., Ltd. on its Hong Kong listing compliance issues.




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We help financial services organisations structure and manage their businesses to comply with regulatory requirements in the most efficient way. While regulatory change is challenging, it also presents opportunities to financial services organisations which we help our clients identify and exploit.


Securities investigations and litigation ■

Regulatory investigations into market misconduct and ■

financial crime

Enforcement practice and procedure, tribunal proceedings ■

Obligations of senior managers and internal systems ■

and controls

Listing Rules and Disciplinary Procedures ■

Codes of Corporate Governance and Financial ■

Regulation requirements

Anti Money laundering systems and controls ■


Advising a leading International securities house ■

in connection with alleged breach of compliance regulations and carrying out an extensive examination and review of the company’s written office policies, account opening procedures, front office dealing procedures, proprietary trading desk and other compliance issues and preparing two reports for the SFC and HKMA

Conducting an internal investigation for an ■

international investment bank in relation to alleged breaches in Tokyo and Hong Kong of Sarbanes Oxley legislation, harassment and retaliation by senior staff

Conducting an internal investigation for an international ■

bank in relation to dealings with a Chinese conglomerate and FOREX trading issues being investigated by the Commercial Crime Bureau and the SFC

Representing a major China Mainland bank on issues ■

arising from a loan facility, including the assignment of rights, possible breach of directors’ duties, the common law offence of conspiracy to defraud, knowing assistance/receipt and breach of section 47A Companies Ordinance for unlawful financial assistance

Representing an international software provider in ■

U.S. and Japan in connection with the Securities and Exchange Commission (SEC) investigation on the provider’s Form 10- (this involved an internal investigation in the company’s Japan office)

Advising a fund management group in connection with ■

a SFC/SEC inquiry into alleged insider trading in a US public company

Advising US investment bank on licensing issues in ■

various jurisdictions in Asia, and risk management audit in Korea

Carrying out a comprehensive review of the internal ■

controls of a major US investment bank and developing additional compliance procedures

Our Financial Services Regulation team offers specialist legal expertise and practical advice.

FINANCIAL SERvICES

Advising an independent non-executive director of ■

an Asian investment bank in connection with an SFC investigation into the cause of collapse of the group and specific decisions of the board

Advising an international futures company in ■

connection with SFC Inquiry into Futures Trading/Short Selling




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Our knowledge of government, regulators and the private sector places us in the ideal position to provide strategic advice to optimise your place in the market. Our lawyers have the experience and insight from Europe, Asia and the US to find creative and innovative approaches to trade and competition law issues – from obtaining a clearance for a merger to defending a cartel investigation; and from counselling on trade remedies to designing compliance programmes for import/export controls or data protection.

AREAS OF EXPERTISE

Competition

Cartels and abuse of dominant position ■

Dawn raids ■

Merger notifications ■

Compliance and training ■

Commercial agreements (joint ventures, distribution ■

and franchising and technology licences)

State aid ■

Procurement ■

Trade and Customs

Trade policy ■

Anti dumping and trade remedies ■

WTO law ■

Tariffs ■

Trade sanctions ■

Fight against obstacles to access third markets ■

Customs issues ■

Import and Export controls ■


Advising a leading speciality chemicals company on ■

its antitrust and competition compliance in China and providing antitrust training

Our Competition and Trade teams provide practical solutions to competition law and trade issues. In competition matters, we balance commercial objectives against the risk of intervention by the competition authorities. Criminal sanctions for cartels in some jurisdictions and the regulators’ powers to impose extensive fines make expert advice an imperative. Our trade teams in Asia, Europe and the United States provide specialist expertise and legal advise on all aspects of international trade law. They can also provide government relations and political lobbying services.

TRADECOMPETITION, CUSTOMS AND

Advising in antitrust litigation in Japan in relation ■

to allegations of unfair business practices by a semiconductor chip manufacture

Advising Chinese and foreign companies in connection ■

the Anti Monopoly Law in China including merger notifications

Advising Hong Kong company under investigation ■

by various competition authorities, with regards to allegations of breaches of competition law

Representing Chinese companies in antidumping ■

investigations brought by US and EU industries, covering products ranging from food items to industrial components to household goods

Representing Vietnamese manufacturers in antidumping ■

investigations brought by US and EU industries, covering products ranging from shoes to seafood

Advising a leading industrial safety products ■

manufacturer on their importation and exportation of their products in various special economic zones in Shenzhen and Shanghai

Advising the leading aircraft manufacturer on Chinese ■

law and government enforcement practice regarding the controls on importation of encrypted software

Advising a Japanese company in its valuation ■

dispute with China Customs. Specifically, there was a disagreement on the valuation of certain royalty payments for parts imported into China

Advising the world’s largest medical products supplier ■

and distributor on the legal, tax, customs and regulatory aspects of its procurement and distribution operations in China

Advised MOFCOM on the treatment of trading ■

companies and market economy status issues under EU anti dumping law

Advised one of China’s largest manufacturers of ■

electronics on the legal, political and economic aspects of EU anti dumping proceedings

Advised a defence company on tariff classification and ■

product reduction issues relating to decisions by Japan’s customs department

Advised on EU anti dumping proceedings related to ■

Chinese exports of stainless steel

Advising Hong Kong companies with regards to the ■

proposed introduction of Competition Law legislation in Hong Kong



Martin DajaniHead of Competition, Asia T +852 2103 0696 [email protected]

Miriam GonzalezHead of Trade T +44 (0)20 7796 6986 M +44 (0)7738 295 501 [email protected]

Satpal GobindpuriPartner, Hong Kong T +852 2103 0836 M +852 9459 0063 [email protected]

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Our Data Protection team provides regulatory advice in relation to a wide range of technology, media and commercial issues including the launch of a client’s products and/or services in Asia.


Strategic advice and risk assessment on data protection ■

issues

Creating, implementing and auditing data protection ■

compliance programmes

Conducting in-house compliance training for local and ■

multinational organisations

Assisting clients in investigations by data privacy ■

regulators

Multi-jurisdictional surveys on data privacy regulations ■


Assisting a major international pharmaceutical company ■

to assess the compliance of its standard documentation with local Asia laws relating to data privacy

Assisting a major international employer services ■

company to review laws relevant to the implementation of a new data warehousing and employment verification service in various Asian countries

Advising an international hospitality industry client ■

on compliance of its customer loyalty programme with data privacy principles in various Asian jurisdictions

Reviewing laws relevant to the implementation of ■

on-line payment systems in various Asia jurisdictions including Japan, Hong Kong and Korea for a global internet company

Assessing laws in relevant Asia countries to determine ■

feasibility of a global internet company launching specific products and services in that country

Advising a European bank’s operations in Asia of ■

the impact of data protection laws in specific Asia jurisdictions

Assisting a financial information service provider on ■

the data protection terms and conditions for use on its web-sites in various Asian countries

Advising a major global IT service provider on its ■

data protection compliance obligations in Asia under a global outsourcing agreement

The Data Protection team provides a wide range of practical advice – carrying out data protection risk assessments; helping companies create and implement compliance programmes to deal with subject access requests; and protecting brand equity in connection with breaches of data protection law.

PROTECTIONDATA



Edward ChattertonForeign Legal Consultant T +852 2103 0504 [email protected]

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Whether you are planning to implement new systems, sell a business or assets, ensure adherence with new compliance measures, conduct an investigation or need to defend a prosecution, we have the expertise to assist. The consequences of a safety, health or environmental prosecution can be very damaging not only to companies in the form of unlimited fines and reputational harm, but also to individuals who can be subjected to arrest, investigation and ultimately fines and imprisonment.

AREAS OF EXPERTISE INCLUDE:

Adequacy of compliance systems ■

Interpretation and application of legal regimes ■

Strategic planning for impending legislative change ■

Establishing due diligence and other defences ■

CSR programmes. ■

Transfer of liabilities; ■

on corporate and property sales and acquisitions ■

for land and building portfolios ■

in contractual arrangements ■

on the appointment of technical consultants ■

Crisis and incident management, investigations ■

and prosecutions


Advising a well known European electrical appliance ■

brand in relation to an electrical safety failure concerning an electric oven supplied by its PRC manufacturer.

Advising a leading Norwegian insurer in relation to ■

a safety issue concerning a vehicle axle supplied by a PRC supplier and its ultimate manufacturer.

Advising a leading supermarket chain on a prosecution ■

by FEHD (Food, Environmental Hygiene Department) relating to mislabelling of oil fish as codfish.

Advising a household name Hong Kong toy distributor/ ■

manufacturer in relation to a Customs and Exercise Department investigation into a baby stroller which allegedly breached safety standards under the Toys and Children’s Products Safety (charges dropped)

Advising a leading drinking water supplier in ■

connection with investigation by FEHD into alleged contaminated water (investigation dropped)

Advising a leading toy manufacturer in connection ■

with an investigation by the International Council of Toy Industries (ICTI) into its manufacturing operations in the PRC

We understand the Regulators’ agendas and provide practical and commercial advice on health and safety, environmental compliance and Corporate Social Responsibility (CSR) programmes. In the case of a potential or actual regulatory intervention, we work proactively with clients to achieve the best outcome.

ENvIRONMENTSAFETY, HEALTH AND




Sammy FangPartner, Beijing T +86 10 65611788-823 M + 86 13910383275 [email protected]

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We are the only global law firm with a dedicated Tax Investigations and Disputes team. As such we are uniquely placed to handle your tax problems. We can manage investigations from start to finish, providing legal advice, undertaking reviews, preparing disclosure reports and negotiating settlements. In addition, our Asian team works closely with colleagues worldwide, both tax litigators and regulatory specialists, so as to ensure that resolving the issues. In one jurisdiction will not cause issues in others (eg transfer pricing). Our International Tax team has over 100 dedicated tax lawyers across our network of offices in Europe, Asia and the US.

AREAS wHERE wE CAN HELP YOU INCLUDE

Advising on all areas of regulatory tax compliance ■

(corporate and individual tax compliance, transfer pricing, employers’ filing obligations, etc)

Advising and assisting companies subject to Inland ■

Revenue and Customs investigations

Representing companies with regard to document ■

production orders

Defending criminal prosecution cases ■

Conducting tax-related litigation at all levels ■

Conducting judicial review cases ■

Examples of work

Advising an internet company in the context of an ■

investigation by the Hong Kong tax authorities as to whether the profits of its business are taxable in Hong Kong as onshore profits

Advising various directors of a company with respect ■

to inquiries by the Hong Kong tax authorities as to their personal tax position

Advising various companies in the context of inquiries ■

in the PRC as to their transfer pricing policies

Advising various individuals in respect of inquiries by ■

the Hong Kong tax authorities as to their status in Hong Kong

Advising on inquiries by the Canadian tax authorities ■

as to the residency status of an individual

Assisting a US pharmaceutical company involved in ■

a tax credit dispute with the US IRS on a financing scheme involving Hong Kong

A tax investigation is an event fraught with potentially significant financial consequences. Given the invariable complexity of tax laws and codes and the wide ranging powers of the authorities in assessing penalties, legal advice should be sought as soon as possible from appropriate legal counsel with experience in handling tax investigations and negotiating settlements with tax authorities. Failing to timely do so can often escalate an issue needlessly and increase your financial risk.

AND DISPUTESTAX INvESTIGATIONS

Advising a listed shoe manufacturer in the context of ■

a tax audit by the Hong Kong tax authorities regarding whether the profits of its business are taxable in Hong Kong

Advising a listed computer equipment manufacturer ■

in the context of a tax audit by the Hong Kong tax authority regarding whether the profits of its business are taxable in Hong Kong

Advising the Hong Kong division of a well-known ■

fashion brand in the context of a tax audit by the Hong Kong tax authorities regarding whether the profits of its distribution business are taxable in Hong Kong

Advising a Hong Kong pharmaceutical company in the ■

context of a tax audit by the Hong Kong tax authorities regarding the deductibility of certain royalties paid



Patrice MarceauPartner T +852 2103 0554 M +852 6337 1640 [email protected]


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REGULATORY RISK IN ASIA