This presentation addresses Distribution modes in China with a bit of WTO, Recent Legal Texts, Competent Authorities, an Excursion to Specific Distribution Issues, with a Trial of an assessment.

1. Shanghai, March 15, 2006
Nathan Kaiser, Attorney-at-Law
www.eigerlaw.com
Distribution in China
Law and reality: a moving target...

2. Overview
1. Distribution modes and a bit of WTO
2. Recent Legal Texts
3. Competent Authorities
4. Excursion: Specific Distribution Issues
5. Trial of an assessment

3. 1. Distribution Modes & a bit of WTO
● Current legal situation / WTO
● Distribution Rights (distribution license)
● “Wholesale”,”Retail”,”Direct selling”, “Internet”, and “Franchising”
● Not a solution: talk & rumors
● The Carrefour-phenomena and its place in history

4. 2. Recent Legal Texts
● “Guidance on Applications for FICE”
(issued Sep. 1, 2005”)
● “Circular on Entrusting Local Authorities for Approval of FICE”
(issued Dec. 9, 2005, in force March 1, 2006”)

5. 3. Competent authorities
● Principle: all approval by local authorities
● Exception: large-scale retail projects
● Exception: direct sales channels
● Exception: raw materials
● Exception: specific products
● Assessment, background of the Circular

6. 4. Excursion: Specific Distribution
Issues
● Books & Publications
● Forwarding & Postal
● Raw materials, oil, steel, coal, etc.
● Importation
● New Company Law… etc. etc. - Q&A
● Overall Assessment: FICE as a “normal company”

7. … things to remember:
● Normalization can be expected
● Local Authorities mostly in charge
● Market now more in charge - private & gov.
● Fine tuning and details can be expected shortly from the
market itself

8. Q & A

9. Merci pour votre attention!