Recently, Yan Huainan, a senior partner at King&Capital Law Firm in Beijing, and attorney Ye Jing were invited to deliver a special lecture for China Supply and Marketing E-Commerce Co., Ltd. (hereinafter referred to as “the E-Commerce Company”) on the topic of “Practical Identification and Prevention of Legal Risks in Financing-Related Trade: An Analysis from Civil Compliance to Criminal Offenses.” Middle-level and senior managers, as well as relevant staff members from the E-Commerce Company and its subsidiaries, participated in the session both online and in person.
China Supply and Marketing E-Commerce Co., Ltd. is the e-commerce division under the All-China Federation of Supply and Marketing Cooperatives and a wholly-owned subsidiary of China Supply and Marketing Group, established on May 28, 2015. With the mission of serving agriculture, rural areas, and farmers, the E-Commerce Company is committed to building a first-class comprehensive service platform for agricultural product supply chains. Leveraging the comprehensive strengths of the national “Supply and Marketing e-Home” platform—including resources, technology, and services—the company strives to build a rural e-commerce service system for supply and marketing cooperatives that is county-based and interconnected nationwide. It works with all parties in the industrial chain to jointly construct a new ecosystem for the agricultural product supply chain in the internet era. The company is dedicated to facilitating the upward flow of agricultural products and the downward flow of industrial goods, promoting the integrated development of online and offline channels, and playing a leading role in serving the national rural revitalization strategy, promoting the circulation of agricultural products, and ensuring urban-rural supply.
King&Capital Law Firm, leveraging its professional expertise and extensive experience in compliance and criminal risk prevention, has established a strong cooperative relationship with the E-commerce Company. This training session is one of the key initiatives through which both parties deepen their exchange of legal practices and support the company’s compliance efforts.
During the session, attorneys Yan Huainan and Ye Jing closely aligned their presentation with the E-commerce Company’s business characteristics. Drawing on a wealth of real-world cases they have handled, they delivered a systematic and in-depth explanation centered on “financing-based trade”—a key compliance issue currently facing state-owned enterprises. They began by examining regulatory policies such as the State-owned Assets Supervision and Administration Commission’s (SASAC) “Ten Prohibitions,” clearly defining the essential characteristic of financing-based trade as “trade in name, lending in substance.” Drawing on typical cases from the Supreme People’s Court, they vividly explained the logic behind the application of “piercing the corporate veil” in judicial practice, analyzed the legal consequences of a sales contract being deemed invalid, and discussed the potential supplementary liability for compensation that intermediary parties may face. In the section on criminal risks, the lecturer focused on the criminal offenses that financing-based trade may involve, including contract fraud, usury, offenses related to the fraudulent issuance of special VAT invoices, bribery and offering bribes, as well as dereliction of duty by personnel of state-owned companies and enterprises, and dereliction of duty in the signing and performance of contracts resulting in fraud.
In addition, the lecturer provided a detailed interpretation of the provisions regarding “lifetime accountability for major decisions” in the *Implementation Measures for Accountability for Violations in Business Operations and Investment by Central Enterprises*, emphasizing the severe regulatory and accountability consequences associated with financing-oriented trade. Finally, targeted preventive recommendations were offered. The entire lecture was presented in an accessible yet thorough manner, featuring substantial case studies and clear logic. Following the training, participants unanimously noted that the course content was closely aligned with practical business operations, combining theoretical rigor with practical depth. They highlighted its strong guidance in identifying and mitigating civil and criminal legal risks associated with financing-based trade, noting that it provided robust support for e-commerce companies to further refine their compliance management systems, enhance risk awareness among all staff, and strengthen their defenses for compliant operations.
Driven by the mission to serve rural revitalization and ensure the smooth circulation of agricultural products, King&Capital Law Firm will continue to uphold its service philosophy of “pursuing excellence and living up to the trust placed in us.” We remain committed to assisting e-commerce companies in proactively mitigating major legal risks, accelerating the establishment of long-term compliance management mechanisms, and providing robust legal safeguards for the high-quality development of the rural e-commerce sector.
