Domestic information

1. The world will usher in the largest wealth transfer period in history: nearly 85 trillion US dollars in global wealth will be passed on to the next generation

Recently, the "2023 UBS Inheritance Forum" focused on the new trends of Chinese entrepreneur inheritance and charity was held in Shanghai. According to the 2022 UBS Investor Observation Report, the world is expected to experience the largest wealth transfer period in history over the next 20 years, with nearly $85 trillion of wealth expected to be passed on to the next generation. The first batch of Chinese private entrepreneurs who benefited from the reform and opening up policy are nearing old age, and the wealth inheritance needs of the affluent population in China are urgent. Inheritance and charity have become the two most thought-provoking themes for the wealthy population. (Source: Financial sector)

Lawyer's recommendation: With the inheritance and handover of huge wealth, the important position of family governance is once again highlighted. Family governance, also known as family governance, typically refers to a joint decision-making system led by the board of directors and family council to assist in managing the relationship between family members and the family's wealth and career. The implementation of effective family governance relies on the coordination of rules and regulations such as the "family charter" and the separation structure of family and enterprise such as the "ownership structure".

2. State Administration of Financial Regulation: Interim Measures for Supervision, Rating and Classification of Trust Companies

On November 16th, the State Administration for Financial Regulation revised and issued the Interim Measures for the Supervision, Rating, and Classification of Trust Companies. The main content of the Measures includes: firstly, clarifying the elements and methods of regulatory rating. The Measures establish five rating modules, namely corporate governance, capital requirements, risk management, behavior management, and business transformation, with scoring weights of 20%, 20%, 20%, 30%, and 10% respectively, and set several factors for adjusting the initial evaluation scores and results. The second is to clarify the implementation process of regulatory rating organizations. The regulatory rating of trust companies is divided into stages such as information submission and collection, initial evaluation, review, result feedback and analysis, dynamic adjustment, and post evaluation. The rating results are divided into 6 levels, and the higher the level, the greater the institutional risk and the greater the need for regulatory attention. The third is to clarify the elements and methods of systematic impact assessment. Using indicators such as the scale of trust business, the situation of trust investors, and the balance of interbank liabilities as evaluation factors, different weights are assigned to screen out trust companies with higher systemic impact. The fourth is to clarify the principles and measures of classified supervision. Gradually increasing the intensity of off-site supervision and the frequency of on-site inspections for trust companies, from regulatory ratings of 1 to 6, will further strengthen supervision for trust companies with systemic impact compared to other companies at the same level, promote their stable operation, reduce the likelihood of business failure and negative externalities, and maintain financial stability. (Source: Official website of the State Administration of Financial Regulation)

Lawyer's recommendation: The release of the "Measures" further improves the regulatory rating rules for trust companies, which is conducive to achieving hierarchical supervision of trust companies and helping the trust industry to "return to its roots, transform and upgrade" as soon as possible, thereby continuously improving the quality and efficiency of the trust industry's services to the real economy.

3. China Trust Industry Association: Release of the "China Trust Industry Social Responsibility Report (2022-2023)"

On November 21st, the China Trust Industry Association officially released the "China Trust Industry Social Responsibility Report (2022-2023)". This is the eleventh industry social responsibility report continuously compiled and released by the China Trust Industry Association since 2013. The report shows that as of the end of 2022, the entrusted management of trust assets in the trust industry reached 21.14 trillion yuan, a year-on-year increase of 2.87%. From the perspective of trust asset sources, the scale of collective fund trusts accounted for 52.08%, a year-on-year increase of 0.55%; The proportion of single fund trust scale was 19.03%, a year-on-year decrease of 2.46%; The proportion of managed property trust scale was 28.89%, an increase of 1.91% year-on-year. From the perspective of trust asset functions, the proportion of investment trusts is 43.92%, a year-on-year increase of 2.55%; The proportion of financing trust scale was 14.55%, a year-on-year decrease of 2.87%; The proportion of transaction management trusts was 41.53%, a year-on-year increase of 0.33%. (Source: Official website of China Trust Industry Association)

Lawyer's recommendation: Based on the data from 2022, the trend of the trust industry returning to its roots and undergoing transformation and upgrading has begun to take shape. To achieve high-quality development in the trust industry, it is necessary to deepen reform and innovation, actively adapt to the internal changes in industry functional positioning, development logic, and business models, as well as the external development requirements of market environment and regulatory policy adjustments and changes, accelerate iteration and upgrading of corporate governance and internal control mechanisms, and improve internal management and operational levels.

4. After declaring inability to repay debts, Zhongzhi was investigated by the Beijing police

Recently, after the official of Zhongzhi Department announced that its total liabilities had reached more than 400 billion yuan and it was unable to repay its debts, the Beijing Chaoyang Police announced that according to law, the wealth company affiliated to the "Zhongzhi Department" was suspected of being involved in criminal investigation, and criminal coercive measures were taken against a number of suspect, such as a certain person, and investors' reporting channels were made public. It is understood that Zhongzhi Enterprise Group (also known as Zhongzhi Group) holds or participates in four wealth management companies, namely Hengtian Wealth, Xinhu Wealth, Datang Wealth, and Gaosheng Wealth. (Source: Ping An, Beijing, Chaoyang)

Lawyer's recommendation: In order to comprehensively investigate the case and fully recover losses, investors are requested to register their cases through the methods announced by the Chaoyang Branch of the Beijing Public Security Bureau, including online reporting, mail reporting, and on-site reporting. The three reporting methods have the same effectiveness.

5. Central Bank Wang Jing: Anti money laundering departments need to strengthen cooperation with tax departments

On November 17th, Wang Jing, Deputy Director of the Anti Money Laundering Bureau of the People's Bank of China, stated at the 13th China Anti Money Laundering Summit and the 3rd Lujiazui National Financial Security Summit that in the context of the national tax authorities promoting the fourth phase of the Golden Tax and strengthening income tax supervision, the big data system will make the information of market entities and individuals more transparent, and the fund transactions and large cash receipts and payments between public and private accounts will be more transparent, The anti money laundering department can strengthen cooperation with the tax department, jointly regulate and utilize the data resources of the financial system, and further unleash the potential of anti money laundering in national governance. (Source: Pengpai News)

Lawyer's recommendation: The supervision of large and suspicious transactions by the anti money laundering department can provide data information and clues for the tax collection and management of the tax department, making it convenient for the tax department to use tools such as the Golden Tax Phase IV to strengthen the tax collection and management of high net worth and high-income individuals.

6. Compilation of Continuously Optimized and Improved Tax and Fee Preferential Policies (2023 Edition) released

The State Administration of Taxation recently released the "Compilation of Continued, Optimized, and Improved Tax and Fee Preferential Policies (2023 Edition)", which comprehensively sorted out and interpreted the continued, optimized, and improved tax and fee preferential policies released since the end of October this year, making it convenient for taxpayers and tax personnel in various regions to query and master, and promoting policy access and quick enjoyment.

The Compilation is compiled in the format of four parts: preferential policies, policy interpretation, instant Q&A, and relevant documents. It includes 70 tax and fee preferential policy documents published in 2023, 6 relevant tax collection and management announcements, 6 policy interpretations, 10 groups of instant Q&A, as well as 33 relevant policy documents from previous years. Based on a comprehensive review of various tax and fee preferential policies, the background of the introduction of key preferential policies, the calculation of tax and fee reductions We have conducted a detailed interpretation of the preferential procedures and provided answers to the practical issues that taxpayers and payers are generally concerned about, taking into account specific scenarios. (Source: State Administration of Taxation)

Lawyer's recommendation: The latest statistical data from the State Administration of Taxation shows that from January to October this year, the country added about 1.6 trillion yuan in tax reduction and fee deferment, with private economy taxpayers being the main beneficiaries of tax and fee preferential policies, accounting for nearly 75% of the total amount. The release of the Compilation of Continuously Optimized and Improved Tax and Fee Preferential Policies (2023 Edition) can enable taxpayers to more accurately and effectively enjoy tax and fee preferential policies, ensuring that business entities should know and enjoy them to the fullest extent possible.

Overseas information

1. The UK will sign the 2019 Hague Convention as soon as possible

The UK government has decided to sign the Hague Convention on the Recognition and Enforcement of Foreign Civil or Commercial Judgments of 2019 as soon as possible. (Source: pink masons)

Lawyer's recommendation: If the UK joins the 2019 Hague Convention, companies will be able to more easily enforce rulings of UK courts in other countries or judgments made by foreign courts in the UK in the future.

2. The FATCA information exchange agreement between Switzerland and the United States has been changed to reciprocal disclosure

Switzerland and the United States have resumed negotiations on the implementation of the US Foreign Account Tax Compliance Act (FATCA). (Source: STEP)

Lawyer's recommendation: FATCA requires foreign financial institutions (FFIs) to disclose US account information to the US Internal Revenue Service (IRS) or pay significant fines to the US government. After this negotiation, Switzerland will have the right to obtain detailed information on the accounts held by Switzerland from the US Internal Revenue Service.