Law & Policy

China Drafts Two New Important Regulations For E-commerce

To better regulate online transactions in China, the Ministry of Commerce has drafted and is soliciting comments from the public on two new rules: the E-commerce Pattern Regulation and Online Shopping Service Regulation.

The two regulations have set standards for each area of e-commerce businesses, ranging from legal qualifications and registration licenses to operation behavior, payment means and service systems. They are applicable to the four kinds of online transaction of B2B, B2C, C2C and G2B (government to business). The draft regulations ask that all online store operators must have a legal entity qualification and they must provide their business license, taxation registration certification, special service license, business address and contact details at the bottom of the home page of their e-commerce websites.

In addition, the regulations put forward requirements for individuals, saying that all individuals must conduct transactions using their real names and the parties involved in C2C must be natural persons and not business entities. The rules say that e-commerce operators should keep users' registration information available in their databases for at least ten years. Websites should also have safe online payment features such as ID certification and e-signatures. They should offer other fund settlement options for consumers, which should be run by a qualified third-party, but the rules do not yet state the qualifications for these third-parties.

The regulations also say that e-commerce platforms must not provide services to unqualified or unlicensed businesses such as those that sell harmful and hazardous goods, they must not deal with special goods like pharmaceuticals and medical instruments.

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