CHINA / National
China may crack down on foreign law firms
(AP)
Updated: 2006-05-16 08:57
China may be preparing to crack down on foreign law firms that violate
restrictions on the type of business they are allowed to do in the
country, according to a document issued by the Shanghai Bar Association.
Foreign law firms are barred from directly handling any business having
to do with Chinese law, though most are violating that rule, said a
memorandum dated April 17 and seen Monday on the bar association's Web
site.
It warned that "their illegal business activities were becoming serious."
Foreign lawyers long have chafed at laws limiting them mainly to
providing consulting businesses regarding laws in their own countries and
international treaties and acting as liaisons between foreign companies
and local law firms.
But like many Chinese laws, restrictions are vague. Foreign law firms are
allowed to provide information about China's legal environment, but not
to interpret the "applicability of Chinese laws," the memorandum says.
It urged government agencies to "take powerful measures to regulate and
restrict illegal activities practiced by foreign law firms in Shanghai."
The document also lists a local hotline for members of the public and
local lawyers to report alleged violations.
Among many allegations, the bar association accuses foreign law firms of
luring locally licensed lawyers with high salaries, conducting
nonlitigation business directly related to Chinese law and, perhaps most
seriously, of evading taxes on business related to their China operations.
A spokesman for the bar association was not immediately available for
comment Monday.
However, local lawyers said they were aware of the document and supported
stronger enforcement of the restrictions, meant to protect the fledgling
local legal services industry.
"They are doing business which they are not authorized to do in China so
of course that affects the business of local law firms," said Wei
Zengming, a member of the Shanghai Bar Association.
"The Ministry of Justice and our bar association should do something to
clean up the legal services market," he said. "If foreign firms are
violating the rules, of course they should be punished."
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