Internal changes at MOFCOM effect FICE Approval Process
According to China.Org.Cn, the approval process for Foreign Invested Commercial Enterprises has changed for a second time this year. The Circular on Delegation of Approval Authority on Foreign Invested Commercial Enterprises (FICEs) (Circular No. 51) went into effect on September 13, 2008. It will have an affect on retail and wholesale enterprises in the television, telephone, mail order, internet and automat, and wholesale of audio-visual products industries, as well as commercial enterprises dealing in books, magazines, and periodicals. Because of MOFCOM’s new national focus and the national need for censorship, the choice of industries that must continue to undergo a two-step process of approval is not surprising. However, I digress.
Before Circular No. 51, all FICEs had to register with provincial COFTECs and then went through a final review by MOFCOM. Now, everyone still has to register with the COFTECs, but only those industries listed above need to go through final approval with MOFCOM.
Xinhua News Agency stated that the change was made to simplify procedures. In many cases, efficiency will probably result. However, the Xinhua article released regarding Circular No. 51 was rather vague. Some FICEs will most likely experience faster approval times. However, it’s doubtful that the above listed industries will be the only industries that have a longer approval process. MOFCOM has been trying to delegate its responsibilities to provincial COFTECs while focusing on matters of national importance. Therefore, MOFCOM will most likely reserve the rights of final approval for larger FICEs and FICEs that take the form of large mergers and acquisitions.
