Introduction by the author
Lin guangjun
Beijing public information law office
More than 10 years of practice, working in the field of criminal defence. In recent years, attention has been focused on the use of criminal means in enforcement cases, using the offence of non-compliance as an entry point for the development of a "criminal plus enforcement" cross-practice system. Specialized in finding criminal leads from implementation deadlocks and opening new avenues of defence for applicants. Operations are concentrated in the guangdong/shenzhen region。
I'm on it
Equity, intellectual property rights, insurance
How do you do "invisible property"
Accounts are empty, property is transferred — it is always thought that hiding property into shares, patents, insurance policies is safe. Really
I quote: "i can't see" does not mean i can't do it
Some of the executives are "smart": no money, but they hold shares in several companies; they have no house in their name, but they have several registered trademarks and patents in their hands; they have zero accounts, but they buy their families high life insurance every year as a means of financial management
Their logic is that equity is not cash, patents are not much, and insurance is personal. So, "assets" are still there, but debt cannot be executed。
This logic may have worked before. However, as the implementation system continues to improve, the three categories of "discovery property" have developed a relatively complete implementation path. As the end of the fourth block, the executive rules for the dismantling of these three types of property also end with the entire "property survey and quest."。
I. Equipment implementation — a complete chain from freezing to conversion
Equity enforcement is the most comprehensive of the three types of property. The provisions of the supreme people's court on certain issues concerning the enforcement of equity interests in the people's court, in force since 1 january 2022 (law interpretation (2021) no. 20) specifically regulates the implementation of equity。
(i) equity in limited liability companies
Stock freeze and disposal limited
Article 39 of the implementing provisions (amendment 2020); provisions of the supreme people's court on certain issues of people's court enforcement of equity (law interpretation (2021) no. 20)
The people's court may dispose of an investment interest or equity held by the enforced person in a limited liability company if: (a) the sale, sale or sale in accordance with the law; (b) the transfer by other means with the consent of a majority of the other shareholders; and (c) the granting and monitoring of the transfer by the enforced person of the proceeds of the transfer to satisfy the obligation。
Priority purchasing rights of other shareholders: under article 84 of the companies act (amended in 2023), the transfer of shares from limited companies to outsiders is subject to notification to other shareholders, who have preferential purchasing rights under the same conditions. The same rule applies in the enforcement proceedings - after the publication of the auction, the other shareholders may be given preference under the same conditions, but the refusal to purchase the priority is deemed to be an agreed assignment without prejudice to enforcement progress。
(ii) shares of listed companies
Enforcement of equity certificates (stocks)
Article 37 of the implementation provisions (amended 2020)
The people's court may seize shares (shares) held by the executed person in a limited company and compel the executed person to transfer them in accordance with the relevant provisions of the company law. Listed company shares are placed directly on online judicial auction platforms and are more efficiently disposed of。
Attention to restricted sales shares: the listed company's limited sales shares (e. G., executive holding, large stockholders' limited sales) cannot be sold directly to the secondary market during the limited sales period for policy reasons, usually in the form of bulk mutual legal assistance transfers, pending release, or in the form of pre-seizure and disposal。
Equity enforcement has an element that can easily be ignored by the applicant: freezing equity does not amount to obtaining money. The freeze is a lock-in and realization requires an assessment, auction and transfer process. The applicant cannot wait until he/she continues to push for subsequent disposal after freezing。
Enforcement of intellectual property rights — prohibition of transfer + compulsory conversion
The registered trademarks, patents and property interests of copyrights are enforceable property rights under the names of the subject。
Prohibition of the transfer of intellectual property
Article 35 of the implementation provisions (amended 2020)
The people's court has the power to rule on the prohibition of the executive from transferring his intellectual property rights such as patent rights, the right to register trademarks, copyrights (part of property rights), etc., if the person is not complying with the obligations established by the legal instruments in force. If the above-mentioned rights have been registered with the competent authority, they shall be accompanied by a notice of assistance to the competent authority, prohibiting the transfer of property rights and, if necessary, ordering the person to deposit the title certificate with the court。
Disbursement pathways: after freezing intellectual property rights, an application may be made for court-commissioned assessment, auction or direct acceptance by the applicant of debt in kind (in exchange for intellectual property). For temporarily non-realizable intellectual property rights (e. G. Patents whose market value is difficult to assess), compulsory licences may also be requested - to be used at third-party expense and to be paid directly for the discharge of obligations。
How did you find out about the executive's intellectual property
The national intellectual property office's patent bulletin, the national trademark office's trademark search system, and the copyright registry system, all of which are free and public. A search using the name of the person to be executed or the name of the business as a keyword often reveals the patent and trademark under its name. Applicants may submit an application for freezing and diversion measures to the court upon their own enquiry。
The real challenge for ipr enforcement lies in the difficulty of realization: the valuation of the market value of trademarks and patents varies widely, and some iprs are listed and not contested many times. Even so, there is a strategic value in applying for enforcement of intellectual property rights — by prohibiting transfers, effectively blocking the path by which leah "sells" intellectual property rights to interested parties and forcing them to perform on their own initiative。
Implementation of the cash value of insurance - the most controversial element at present
Lai bought high life insurance for his family, paid annual contributions and accumulated hundreds of thousands of dollars in cash on insurance policies — is that money enforceable
This issue is clearly regulated by law, but there are differences in practice and applicants need to know the true situation。
The value of the policy in cash, vs. Insurance -- the two concepts cannot be confused
Insurance benefits: compensation received by the insured person or beneficiary following an insurance accident. The money is personal and is generally not enforceable (unless the beneficiary is the executed person)。
The cash value of the policy: the amount returned by the insurance company (i. E. "the value of the refund") upon termination of the contract by the insured person. The money is the property interest of the insured person and is by nature the savings and investments of the insured person, which the mainstream decision of the supreme people's court considers enforceable。
Basis of implementation of the cash value of policies
Article 2 of the regulations of the supreme people's court on the seizure, seizure, freezing of property in the civil enforcement of the people's court (as amended in 2020); article 47 of the insurance law; supreme people's court enforcement decision case (2021) supreme law enforcement authority 35
The value of the policy in cash is a "other property right" enjoyed by the insured person and may be seized, seized and frozen by law. In cases where the defendant is an insured person and other property is not paid in full, the supreme people's court has adopted a number of decisions confirming the cash value of the policy that can be enforced and issuing a letter of assist in enforcement to insurance companies for deductions。
Disagreements in practice: the higher councils of guangdong and shandong, among others, have advocated the premise of the executioner's consent to be released, but the supreme court decision has made it clear that there is no need for the executioner's consent and that the court has the right to notify the insurance company directly of the enforcement. The supreme court's case can be cited as a positive impetus when the applicant encounters negative court enforcement。
The applicant's attention: the distinction between guaranteed insurance and financial insurance
Financial-type insurance (annuation insurance, split-red insurance, altruistic insurance, etc.): cash-value property properties are strong, and local courts generally support enforcement。
Purely guaranteed insurance (pure consumer-type serious illness, periodic life insurance, etc.): cash is of low or zero value and has a strong personal security function, which is more difficult to implement in practice and is not supported by some courts。
The application should distinguish between risk types and focus on financial-type insurance with significant cash value, with a higher success rate。
Iv. Comparison of the substantive thrusts of the three categories of invisible property
Equity enforcement — the most complete and cumbersome of rules
Query channels: national business credit information publicisation system (neis)
Means of freezing: notification of assistance in enforcement to business registers and registration of interest freezes
Disbursement dilemmas: poor equity liquidity of limited companies, potential impediments for other shareholders; relative ease of listing company shares
Fastest route: second-rate application for equity in exchange for debt
Intellectual property rights - difficult but effective closure
Access: national intellectual property office, national trademark office, copyright registry
Means of freezing: notification of assistance to enforcement to competent authorities, prohibition of transfer
Hard spot: difficult assessment, few buyers, high rate of flow
Strategic value: a ban on diversion can block the old rei's path and force it to perform
Cash value of insurance - disputed but supported by the supreme court
Query channels: there is currently no unified online search system, which can be used to apply for court investigation orders requiring the respondent to report the discovery of property
Means of freezing: provision of notice of assistance to insurance companies for enforcement and freezing of the value of insurance policies in cash
Disbursement path: inform insurance companies to withhold cash value
Distinction: financial insurance priority, pure security controversial
V. Criminal leads behind invisible property
These three types of property, the criminal leads left behind by the transfer and concealment of the old man, are often more visible - because the transfer of such property requires active operation and the time nodes are more easily fixed。
Three types of high frequency criminal leads
1 malicious post-execution transfer of shares: upon the entry into force of the judgement, the person against whom the enforcement has transferred the company's shares to a spouse, child or related person at a manifestly low price, thereby claiming that "no assets in the name of the person" — which constitutes "transfer of property" in the context of the offence of refusal to comply — the time of transfer of the equity and the time of entry into force of the judgement are key evidence。
(2) continued disposition of intellectual property after attachment: after the court has given notice of the prohibition of transfer, the enforcing person has privately licensed another person to use or transfer intellectual property at a cost less than reported — "disposal of seized property" in the offence of refusal。
Use of insurance to conceal assets: executed persons pay significant contributions during the performance period, converting cash available for execution into "hidden" cash value of the policy - - the time node, if followed by an enforcement notice, may constitute "transfer of property" in the context of the offence of refusal。
Summary of the fourth block — a complete system of property surveys and freezers
Looking back at titles 10 to 16, seven articles on board four form a complete property discovery and disposal system:
Discovery of property (10-11): reporting of property orders to be submitted by the person to be executed, verification by the court control system for you, audit of accounts。
Locking of property (pages 12-13): the rules underlying the seizure of frozen seizures, as well as five complex categories of joint, mortgage, lease, non-residental dissent, and waiting for seizure。
It becomes money (part 14): a complete process of transfers, auctions, sales, debt in kind。
Follow-up (no. 15-16): recovery of claims and income in the hands of third persons, as well as three special types of property: equity, intellectual property, insurance。
These seven are the whole chain from "seeing property" to "get paid." a hidden line running through it is always a criminal clue to the crime of refusal — the lack of cooperation at every stage of the execution may constitute evidence of a crime。
Next, the "menual execution" series will enter the new block and continue to explore the criminal advantage of implementation。
End of plate four
Thank you for your continued interest in the criminal enforcement series
