In 2001, China promulgated the groundbreaking Trust Law, however, because of the newness of this legal concept, it was very general. As such, the trust industry remains largely undeveloped as compared to Western nations. Additionally, the law made mere mention of charitable trusts, without enumerating ground rules for their implementation and operation.
Upon approval of the People's Congress of China, the Chinese Bank Regulatory Commission has decided to make more detailed and practical regulations in cooperation with various other related ministries or committees of the Chinese government. In order to do so more effectively, they held a symposium on July 23, 2005, with keynote presentations by Managing Partner of Lehman, Lee & Xu Edward Lehman with the assistance of attorney John Lee, and a renowned Professor from Taiwan. As the vice-chairman of the ABA China Committee Mr. Lehman discussed charitable trusts within the Common Law system, while the Taiwanese professor detailed the system from a Civil/Continental perspective.
Attendees were officials from 12 state government agencies, including the China Banking and Regulatory Commission (CBRC), Ministry of Civil Affairs, Legal Department of the State Council, Ministry of Science and Technology, and Ministry of Health. The conference was preceded by a paper outlining the various requirements and issues within the trust systems of the respective countries. In summary, Mr. Lehman's presentation overviewed the trust system generally, then discussed the different regulatory treatment afforded to charitable trusts, tax treatment, and then concluded with several recommendations to the Chinese government. In particular, he suggested that the government ensure that the trust system of the United States not be simply adopted, but that relevant changes must be made, particularly with regards to increased regulatory and enforcement measures. Further, he suggested that the Chinese government take the process slowly and implement allow for several trial charitable trusts, before allowing them on a larger scale.
The event was covered by some of the biggest Chinese media, such as China Daily, CCTV, Financial Magazine, etc. The presentation was extremely successful, as the officials obtained a better perspective from which they will draft China's regulations.
To view pictures of the event, please click here .
