On 27 July 2011, a Memorandum of Understanding on Antitrust and Antimonopoly Cooperation was entered between the United States Department of Justice and Federal Trade Commission on the one hand, and the People's Republic of China National Development and Reform Commission, Ministry of Commerce, and State Administrative for Industry and Commerce on the other hand (the "MOU").
Purpose of the MOU
This MOU establishes on a basis for technical cooperation and information sharing between US antitrust agencies and PRC antimonopoly agencies, which are becoming increasing important as they assert jurisdiction over global business transactions.
This MOU creates a framework for a long term cooperation that should enhance the effective enforcement of the competition laws and policies of both countries. This cooperation should allow the PRC's relatively new antimonopoly agencies to benefit from the accumulated experience of the US antitrust agencies as China emerges as a major competition regulator.
Scope of Cooperation
The MOU sets up two levels of cooperation : 1) a high-level of joint dialogue to take place periodically between senior US and Chinese officials to be held on a rotating basis in the US and PRC; and 2) an ad hoc arrangement pursuant to which its officials at an operating level will have the opportunity to cooperate and exchange information.
The MOU will permit each party to keep the other informed of significant competition policy and enforcement developments in their respective jurisdictions and to exchange experience and information on competition enforcement. Subject to relevant legal constraints, the MOU permits cooperation on related investigations. It is contemplated that detailed work plans for cooperation will be developed by each enforcement agency party to the MOU.
Information exchanged between the agencies is to be kept confidential. The information exchanged will not include information that a relevant agency is prohibited by law from disclosing or would be incompatible with the agency's interest.
The commencement of this formal cooperation and the internationalization of PRC antimonopoly efforts are positive developments. As PRC antimonopoly law has developed, international participation in the process has been limited with foreign lawyers being excluded from attending PRC antimonopoly proceedings, even for transactions occurring outside of China. It is hoped that such cooperative efforts between the government agencies of various countries will help to produce globally more predictable and standard antimonopoly enforcement policies. More cooperative arrangements should be expected as China emerges as a third major pillar of global antimonopoly enforcement with the US and the EU.