We’ve had some USA companies come to us with a USA judgement ordering an injunction or freeze over a China bank account of a Chinese company the USA client is in a dispute with. When we see these cases, we always have to tell the client we can’t help. The USA court order is useless over Chinese banks.
The
Law of the People’s Republic of China on Commercial Banks
(the Banking Law, effective December 27, 2003), sets out the legal regime governing operations of banks in China.
Commercial banks shall be subject to the supervision of the banking regulatory organ of the State Council according to law, unless otherwise the law prescribes that the relevant business thereof shall be subject to the supervision of any other regulatory department or organ, the provisions shall prevail.
Commercial banks shall follow the principles of voluntary deposit and free withdrawal, paying interest to depositors and maintaining confidentiality for depositors in handling individual savings deposits.
Commercial banks have the right to refuse any entity or individual to inquire about, freeze or deduct individual savings accounts, unless it is otherwise prescribed by laws.
A commercial bank has the right to refuse any entity or individual’s inquiry about the account of an entity, unless it is otherwise prescribed by laws and administrative regulations; it also has the right to refuse any entity or individual’s request for freezing or deducting the account, unless otherwise as prescribed by laws.
Under China law, Chinese banks have the right to refuse any order by a foreign court to freeze assets. Chinese banks are subject to the supervision of the State Council, and under the regulatory agencies of the People’s Bank of China and the China Banking Regulatory Commission.
Regulations promulgated by the People’s Bank of China and the China Banking Regulatory Commission prohibit China banks from executing a foreign injunction or freeze on assets held in a Chinese bank.