Notice of the Supreme People's Court on Maximizing the Role of Trial Function and Creating a Good Legal Environment for Entrepreneurship and Innovation by Entrepreneurs

· Document Number：No. 1 [2018] of the Supreme People's Court

· Area of Law： Legislative Affairs State Organs

· Level of Authority： Working Documents of the Supreme People's Court and the Supreme People's Procuratorate

· Date issued：12-29-2017

· Effective Date：12-29-2017

· Status： Effective

· Issuing Authority： Supreme People's Court

Notice of the Supreme People's Court on Maximizing the Role of Trial Function and Creating a Good Legal Environment for Entrepreneurship and Innovation by Entrepreneurs
(No. 1 [2018] of the Supreme People's Court)
The higher people's courts of all provinces, autonomous regions, and municipalities directly under the Central Government; the Military Court of the People's Liberation Army; and the Production and Construction Corps Branch of the Higher People's Court of Xinjiang Uygur Autonomous:
On September 8, 2017, the CPC Central Committee and the State Council issued the Opinions on Creating a Sound Entrepreneur Growth Environment, Advocating Excellent Entrepreneurship and Better Using Entrepreneurs' Role (hereinafter referred to as the "Opinions"), a major move to advance the supply-side structural reform, implement the innovative development strategy, and promote sustained, stable and sound economic development. For the purposes of implementing the spirit of the 19th CPC National Congress and the requirements of the Opinions in depth, maximizing the role of trial function, lawfully, equally protecting the lawful rights and interests of entrepreneurs, and creating a good legal environment for entrepreneurship and innovation by entrepreneurs, the notice is hereby given as follows.
I. Profoundly recognizing the significance of lawfully, equally protecting the lawful rights and interests of entrepreneurs. Entrepreneurs are major parties to economic activities. Since the reform and opening up, a group of excellent entrepreneurs have grown quickly in market competition, making significant contributions to accruing social wealth, creating jobs, promoting economic and social development, and enhancing comprehensive national power. It is significant for enhancing entrepreneurs' sense of security of their person and property, stabilizing public expectations, allowing entrepreneurs to be relieved in operations, feel reassured in investment and focus on entrepreneurship, and maximizing the role of entrepreneurs in developing a modern economic system and promoting sustained, stable and sound economic development that the people's courts maximize the role of trial function, lawfully, equally protect the lawful rights and interests of entrepreneurs, and create a good legal environment for entrepreneurship and innovation by entrepreneurs.
II. Protecting personal freedom and property rights of entrepreneurs by law. Criminal laws and judicial interpretations shall be strictly enforced, and it shall be firmly prevented to use criminal means to interfere with economic disputes. The principle of nulla poena sine lege shall be adhered to, and the conduct of entrepreneurship and innovation by entrepreneurs in production, operation and financing activities shall not be deemed and punished as crime as long as it does not violate criminal laws. The essential elements of the illegal business crime and the contract fraud crime shall be stringent so as to prevent arbitrary expansion of application. Civil disputes arising over the course of contract formation or performance may, in the absence of sufficient evidence of crime constitution, not be processed as criminal cases. The illegal income and lawful property of entrepreneurs shall be strictly distinguished, and the judgment for recovery or order for return and compensation may not be made in the absence of sufficient evidence of illegal income. The personal property of entrepreneurs and the property of legal person enterprises shall be strictly distinguished, and when the crime by an enterprise is processed, the lawful property of the entrepreneur and the property of any member of his/her family may not be involved.
III. Protecting the lawful rights and interests of entrepreneurs in good faith according to the law. The effect of contracts entered into between the government and enterprises shall be properly recognized, and in the case of breach of undertakings by the government, particularly breach of contract or noncompliance with agreement solely for such reasons as government transition and leadership reshuffle, the reasonable appeals of enterprises shall be supported according to the law. Civil and commercial and administrative dispute cases caused by revision of government plans or policy changes shall be properly decided, and if revision of government plans or policy changes render impossible the performance of civil and commercial contracts entered into by parties, the claims of parties for rescission of contracts shall be supported in accordance with the law. A party who demands the refund of the fee for assignment of the right to use, investment, or rental paid to a state-owned party or its assumption of liability shall be supported in accordance with the law. An entrepreneur whose property is expropriated or requisitioned shall be fairly, reasonably compensated by comprehensively using multiple means.
IV. Protecting intellectual property rights of entrepreneurs by law. The evidence rules for actions in line with the characteristics of intellectual property right cases shall be improved, and the problem that it is difficult for holders of intellectual property rights adduce evidence shall be solved in priority. The "three in one" trials of civil, criminal and administrative cases with regard to intellectual property rights shall be advanced, and the overall efficiency of judicial protection of intellectual property rights shall be enhanced. A judicial determination mechanism for damage due to infringements guided by the market value of intellectual property rights, focusing on compensation, supported by punishment, shall be developed, and the compensation standards for infringement on intellectual property rights shall be raised. A punitive compensation system for intellectual property rights shall be explored and established to focus on solving the problem of low cost of infringements but high cost for entrepreneur to defend their rights in practice. The principle of equal attention to lawfully maintaining the lawful rights and interests of workers and promoting enterprises' survival and development shall be adhered to, and trade secrets and other lawful rights and interests of employers shall be protected according to the law.
V. Protecting the operation autonomy of entrepreneurs by law. Financial trials shall be strengthened, and financial services shall be promoted in serving the real economy. Commercial banks, pawn companies, small-loan companies and other financial institutions, which collect unreasonable charges in disguise of high interest shall be disposed of according to interest rates for private lending, mutatis mutandis, so as to reduce the cost for enterprises to raise financing. The trial of bankruptcy cases shall be strengthened, and for enterprises in temporary operational difficulty but meeting market demand and possessing development potential and business value, reorganization, compromise and other means shall be comprehensively used to promote the optimized combination of factors of production and transformation and upgrading of the enterprises. Charges collected from enterprises in violation of any law or regulation, or illegal interference of the operation autonomy of enterprises in the name of various supervisory inspections shall be rectified as legally required. Property preservation, conduct preservation, and other compulsory measures shall be taken in strict accordance with the law so as to prevent parties from using preservation means in bad faith to infringe the ordinary production and operation of enterprises. In connection with indebted enterprises in temporary working capital turnover difficulty but with prospects for operational development, freezing or appropriating working capital and other means shall be used prudentially. The review of sham actions and bad-faith actions shall be strengthened, and blows to competing enterprises or damage to entrepreneurs' reputations by using actions in bad faith shall be processed in accordance with the law on a case-by-case basis.
VI. Endeavoring to realize the rights and interests of winning entrepreneurs in actions. Various compulsory enforcement measures shall be comprehensively used to accelerate the realization of the claims of enterprises. The credit punishment of dishonest persons subject to enforcement shall be enhanced, and the improvement of the big pattern of credit punishment in which the dishonest "are restricted everywhere for their dishonesty in one place" shall be promoted. In addition, a social atmosphere encouraging innovation and tolerating failure shall be created. If the obligation imposed by an effective adjudicative instrument has been discharged, or an applicant abuses the list of dishonest persons subject to enforcement, the entrepreneur shall be rehabilitated in a timely manner. An entrepreneur who becomes insolvent due to business failure but intends not to evade enforcement shall be removed from the list of dishonest persons subject to enforcement in a timely manner.
VII. Practically rectifying entrepreneur-related misjudged property right cases. The identification and rectification of entrepreneur-related misjudged property right cases shall be further intensified, and the cases shall be re-tried in a lawful and timely manner and rectified as soon as possible. The State Compensation Law shall be invoked accurately, the state compensation proceeding shall be initiated in a timely manner, entrepreneur-related state compensation cases shall be equitably, efficiently decided, the enforcement of compensation decisions shall be enhanced, and the lawful rights and interests of entrepreneurs shall be guaranteed in accordance with the law.
VIII. Constantly improving judicial policies maintaining the lawful rights and interests of entrepreneurs. The building of "smart courts" shall be further accelerated, information technology shall be fully used, the difficult problems in judgment enforcement relating to entrepreneur cases shall be surveyed in depth, trial experience shall be summarized in a timely manner, and adjudicative rules shall be improved. Development of judicial interpretations and issuance of guiding cases shall be enhanced to unify judicial measure and adjudicatory standards. The comments and suggestions of entrepreneurs shall be fully requested over the course of development of relevant judicial policies and judicial interpretations.
IX. Promoting the creation of a good social atmosphere lawfully guaranteeing the lawful rights and interests of entrepreneurs. The policies of the party and the state for lawfully, equally protecting the lawful rights and interests of entrepreneurs and advocating excellent entrepreneurship shall be further vigorously publicized through open court hearing and other visual means. The work of interpreting the law with cases shall be constantly enhanced, and a group of typical cases and successful practice and experience in connection with lawful protection of lawful rights and interests of entrepreneurs shall be issued in a timely manner, so as to promote the creation of a good legal environment and social atmosphere for sound growth of entrepreneurs.
X. Raising entrepreneurs' awareness of maintaining their rights and interests in accordance with the law and lawful operations. The legal publicity and training for entrepreneurs shall be enhanced, and the awareness and ability of entrepreneur to maintain their lawful rights and interests shall be raised or improved. Undermining the market order, unfair competition and other illegal acts shall be cracked down upon in accordance with the law, entrepreneurs shall be vigorously guided in observing the law, maintaining in good faith, competing fairly and fulfilling their responsibility in operations, and excellent entrepreneurship shall be advocated.
The people's courts at all levels shall strengthen organization and leadership, make work plans, and practically implement the work of protecting the lawful rights and interests of entrepreneurs in accordance with the law. New situations and problems encountered in trial and enforcement shall be reported to the Supreme People's Court in a timely manner level by level.
Supreme People's Court
December 29, 2017