Declaration of Disclosure – Chinese courts begin to issue Community Property Declaration Orders
The revised version of the Women's Rights and Interests Protection Law was effective from January 1st, 2023. It is the first amendment to women-focused legislation in 15 years. With the promulgation of the law, women’s rights and interests will receive better protection.
More and more Chinese courts have started requiring divorcing couples to declare their marital property according to Article 67 in the PROTECTION OF WOMEN'S RIGHTS AND INTERESTS LAW OF THE PEOPLE'S REPUBLIC OF CHINA (2022). The Pudong New Area’s court in Shanghai issued the district’s first marital property declaration order to a divorcing couple on Feb 16, 2023.
What are the legal consequences of failing to report truthfully?
If one party fails or refuses to report the marital property will be considered a failure to make a truthful declaration. Moreover, if one party fails to fulfill this obligation, conceals, transfers, sells, destroys, or squanders the joint property of the spouses, or forges joint debts of the spouses in an attempt to seize the property of the other party,” in the case of division, the party “may share less of the property of the other party or shall not have any property.”
What needs to be declared?
Both community property and community debt need to be declared.
What is community property?
The following property acquired by the spouses during their marriage constitutes community property and is jointly owned by the spouses:
- salaries and wages as well as bonuses and other remuneration received from services rendered,
- proceeds obtained from production, business operation, and investment
- proceeds arising from intellectual property rights,
- except property that belongs to only one spouse as provided in a will or gift contract, property acquired from inheritance or given as a gift; and
- other property that shall be jointly owned by the spouses.
What is community debt?
Debts incurred with the joint signature of both spouses or with the subsequent acknowledgement of one of the spouses, as well as debts incurred by one of the spouses in his or her own name for the family's daily needs during the marriage.
What are the reporting requirements for each type of property?
- Real estate: provide real estate register, real estates title certificate, house sale and purchase contract, house mortgage loan contract, bank repayment statement, etc.
- Vehicles: provide vehicle title registration certificate, vehicle driving license, vehicle sale and purchase contract, loan contract, bank repayment statement, etc.
- Cash, deposits, financial products: provide bank deposit slips, bank history transaction details, bank pass, etc.
- Stocks: provide details of securities account transactions, etc.
- Insurance: provide insurance contracts, insurance payment statements, proof of cash value of policies, etc.
- Debts: provide proof of debts, contracts of formation of debts, etc.
- Other evidence relevant to the property claim.
What’s the deadline for reporting?
The filing period shall be subject to the requirements of the filing order issued by the court. Divorce litigants are generally required to file within the date of receipt of the filing order and before the expiry of the time limit for providing evidence. If there are difficulties within the specified filing period, they can explain the reasons to the court and apply for an extension of the time limit.
Implementing the marital property declaration system will help solve the practical dilemma of identifying the community property of the spouses in divorce proceedings, encourage the parties to litigate in good faith, facilitate the court to resolve divorce disputes fairly and efficiently, safeguard the legitimate property rights and interests of the weaker party.