./.RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/219
22 October 2002
(02-5774)
Council for Trade in Services Original:  English
COMMUNICATION FROM AUSTRALIA
TRM China – Trade in Legal Services
The attached communication has been received from the delegation of Australia with the
request that it be circulated to the Council for Trade in Services.
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Australia welcomes China’s efforts to implement its commitments under Paragraph 18 of its
Protocol of Accession into the WTO.  Australia has a number of questions concerning legal services
on which it seeks China’s responses.
China issued Stipulations of the Ministry of Justice Concerning the Enforcement of the
“Regulations on the Management of Representative Offices set up by Foreign Law Firms in China”that became effective as from 1 September 2002.
1. In relation to the establishment of representative offices of foreign law firms, China
committed under the GATS to eliminate both geogra phic and quantitative limitations within one year
after China’s accession to the WTO (by 11 December 2002).  However, Article 4 of the Stipulations
appear to allow China to impose both geographic and quantitative limitations on the establishment of
representative offices on the basis of economic and development needs as well as other factors.
Could China please justify the imposition of these additional limitations in light of its GATS
commitments, or alternatively, describe how Article 4 would be amended to become
consistent with China’s GATS commitments?
2. Article 10 of the Stipulations  introduces a new limitation on the establishment of
representative offices.  It requires a foreign law firm to have been in operation in China for three years
continuously before it is eligible to open another representative office in China.
Again, in light of China’s commitment to eliminate quantitative limitations on the
establishment of representative offices, could China please explain how Article 10 is
consistent with its GATS commitments, or al ternatively, describe how Article 10 would be
amended to become consistent with China’s GATS commitments?
3. Article 32(4) of the Stipulations  appear to impose new limitations on the capacity of foreign
lawyers to represent their clients before arbitral tribunals.  Until the Stipulations  came into effect on 1
September 2002, that is, including the period after China’s accession to the WTO, foreign lawyers
represented clients before arbitral tribunals.  The new restriction even appears to extend to preventing
foreign lawyers providing comments to clients on facts touching upon the laws of China.S/C/W/219
Page 2
Please justify the imposition of new limitations on foreign lawyers representing clients before
arbitral tribunals, particularly the restriction on providing comments on facts touching upon
the laws of China, or alternatively, explain how Article 32(4) would be applied in a way
consistent with both China’s general GATS commitment not to introduce additional
limitations after accession to the WTO, and th e specific commitment of permitting foreign
lawyers with the capacity to provide advise on the impact of the Chinese legal environment.
4. Article 32 of the Stipulations  define areas of practice proscribed for foreign lawyers in China.
The breadth of Article 32 appears to restrict the capacity of foreign lawyers to advise clients “on the
impact of the Chinese legal environment.”
Could China please explain how Article 32 will be applied in a way consistent with China’s
GATS commitments, or alternatively, describe  how Article 32 would be amended to become
consistent with China’s GATS commitments?
5. Article 40 of the Stipulations  appear to prevent foreign law firm representative offices from
paying fees to Chinese lawyers.  This appears to limit the scope of “entrustment relations” between
representative offices and Chinese law firms and, in particular, the capacity of representative offices
to “entrust” Chinese law firms to deal with Chinese legal affairs on behalf of foreign clients as
permitted by China’s commitments under the GATS.
Please explain how Article 40 will be applied in a way consistent with China’s GATS
commitments, or alternatively, describe how  Article 40 would be amended to become
consistent with China’s GATS commitments.
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