MOFCOM Issues Final National Security Review Rules
September 20, 2011
On August 25, 2011, the PRC Ministry of Commerce (“MOFCOM”) issued final rules regarding China’s national security review scheme for transactions by foreign investors (“Circular 53”). Circular 53 became effective September 1, 2011, and replaces the Interim Provisions of the Ministry of Commerce on Matters regarding the Implementation of the Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "Interim Rules"). The national security review scheme was initially established by China’s cabinet in February 2011 via the Notice on Establishing Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors. Most of Circular 53’s changes to the Interim Rules are minor. That said, however, foreign investors should be attentive to certain changes to the Interim Rules.