Building a Sound Judicial Environment

Shanghai launched a campaign against bank card frauds on April 2, 2010

A judicial environment capable of handling financial cases is a basic safeguard for regulating financial practices and protecting the legal rights of financial traders, a powerful tool for upholding financial order and punishing financial crime, and also an effective means of maintaining financial stability and security in a nation. A sound and robust judicial environment is an important safeguard for developing Shanghai into an international financial center and for constant innovation and development in the financial sector. A judicial environment consistent with international convention and the need for growth is of major significance to the development of Shanghai into an international financial center and to the development of the financial sector.

(1) Financial Criminal Investigation

Under the current system, the main agencies responsible for investigating financial crime are the Police Bureau and the Peoples’ Procuratorate.

(2) Financial Procuration

On March 19, 2009, the People’s Procuratorate established China’s first dedicated financial procuration department in Pudong: the Financial and Intellectual Property Crimes Prosecution Office of the People’s Procuratorate in Pudong. In turn, the procuratorates in the four districts of Huangpu, Jing’an, Yangpu and Xuhui established financial divisions; the procuratorates that did not establish specialized departments all set up specialized teams for handling financial cases. On November 30, 2011, the Shanghai Municipal People’s Procuratorate, the First Branch of the People’s Procuratorate of Shanghai and the Second Branch of the People’s Procuratorate of Shanghai established offices specializing in financial matters. Work has already begun on a specialized three-tiered system of financial procuration at municipal, branch and district (county) level. Specialized financial divisions handle cases of financial fraud, disruptions to financial order, insider trading, market manipulation and other financial crimes, and also engage in regular procuratorial duties: examining and approving arrests, reviewing prosecutions and supervising litigations. These agencies are also in charge of researching and analyzing financial crime and developing ways to prevent it.

(3) Finance-Related Trials

On November 13, 2008, the Pudong Court turned what was originally a specialized collegiate bench into the first finance tribunal in China (Civil Trial Court 6). This tribunal was the first court in China to deal with QDII schemes by foreign-funded banks, asset securitization and other new types of cases. Other districts courts not yet ready to set up separate financial tribunals have also established collegiate bench dedicated to handling financial disputes. By the end of 2010, finance tribunals had emerged at three levels of courts in Shanghai: the High People’s Court, the Shanghai No. 1 and No. 2 Intermediate People’s Courts, and the district courts, such as in Pudong, Huangpu, Yangpu and Minhang, while another 14 distrct courts had collegiate benches specializing in finance disputes. Courts are better equipped to handle financial cases with these specialized hearings. This helps to guard against risk and also promotes market stability and the development of standards.