China Matters: MOFCOM Draft Rules on Prepaid Cards Underline Continued Government Focus on Popular Gift
January 02, 2012
BY LESLIE LIGORNER, ANANDA MARTIN & HENRY LI
As part of an ongoing effort to curtail domestic corruption, the Chinese government continues to tighten regulations governing the commercial prepaid card market. On November 23, 2011, Chinas Ministry of Commerce released its Rules on the Administration of Single Use Commercial Prepaid Cards for public comment. As the third government release in 2011 in connection with this popular form of gift-giving, the Draft Rules impose significant compliance obligations on card issuers. Companies that purchase prepaid cards as promotional items or as gifts for customers or government officials should ensure that their internal policies and practices with respect to these cards accurately reflect the Chinese governments intent to curtail their misuse as a means of tax evasion and bribery.