A US federal agency is accusing Chinese companies of using legal firewalls to protect themselves from lawsuits in America. The report, by the US-China Economic Security Commission, claims the companies use complicated corporate structures to shield their China-based parent companies from US lawsuits. They are also accused of using Chinese secrecy and banking laws to exempt them from turning over evidence and responding to US court documents.
Gucci case
The report cites a number of examples including a 2011 case against Chinese companies accused of selling counterfeit handbags where Gucci America tried unsuccessfully to force the Bank of China to turn over financial records related to the sales of the disputed goods. The Bank of China claimed that it was unable to provide the informatin due to Chinese law.
Jurisdiction of US courts
The agency calls on Congress to establish that Chinese companies fall under the jurisdiction of US courts and require that Chinese firms assign agents to accept subpoenas and other US court documents. The US-China Economic Security Commission was created to oversee the national security implications of US-China business. Source: ArkansasOnline
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