Exit Restrictions in the Context of Chinese Civil Litigation

Abstract

In recent years, literature has pointed to the problem of exit restrictions that may be imposed upon defaulting debtors in China. The Civil Procedure Law allows courts to impose exit restriction as a measure to enforce judicial decisions, but the Exit-Entry Administration Law extends this regulation to pending civil cases. The practice of courts to apply exit restriction as a form of injunction exhibits a number of problems: the legal basis is vague, the scope of application to legal persons is unclear and courts often conduct only a formal examination of applications. As their aim is not to directly safeguard assets in dispute, it is debatable whether exit restrictions should be classified as preservative measures as applied by courts. When a legal entity is a defendant in a civil case, exit restriction can be applied to almost any of its managerial staff. Finally, exit restrictions are a considerable impingement on personal freedom, and yet, in practice, they are imposed in a quick and severe manner and legal remedies are opaque. As a result, a high degree of legal uncertainty evolves, which may well deter foreign individuals and enterprises from investing in China.

Keywords: People’s Republic of China, civil procedure, immigration legislation, exit restriction, court practice