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China Travel Ban

On the 27th of March, the People’s Republic of China announced two important changes concerning travel to China. The first, a statement from the Civil Aviation Administration which stated each Chinese airline is only allowed to maintain one route to any specific country with no more than one flight per week; while each foreign airline is only allowed to maintain one route to China with no more than one weekly flight.

In conjunction with this drastic reduction in international travel to China, the Ministry of Foreign Affairs has decided to temporarily suspend the entry into China by foreign nationals holding visas or residence permits still valid on the 26th of March 2020 to be effective from midnight the 28th march 2020.

Visas which are issued from the 27th of March onwards shall remain valid for entry to China, however it remains to be seen, to which extent visas shall be issued, the announcement has provided the following statement as guidance “Foreign nationals coming to China for necessary economic, trade, scientific or technological activities or out of emergency humanitarian needs may apply for visas at Chinese embassies or consulates.

Potential cause for Force Majeure

Force Majeure is a concept recognised under Civil Law in China and exists as a remedy regardless of the existence of a force majeure clause in a contract. In order to invoke a force majeure, there must be a causal link between the force majeure event and the affected party’s failure to perform. Moreover, a party may be required to show that it made a reasonable effort to mitigate the effects of the force majeure event. However, the failure to perform need not rise to the level of impossibility rather the performance can be commercially impracticable, unreasonable, or fundamentally at odds with the business of a party. If a force majeure provision does apply, the affected party is excused from its obligations under the contract for at least as long as the force majeure event continues, and termination of the contract may be possible if the force majeure event continues for an extended period of time. Generally, force majeure provisions also contain a notification provision, whereby the affected party must notify the other contracting party in a timely manner.

Ramifications for expatriates currently outside of China

Expatriates currently outside of China may have potential concerns regarding their job security.

All employees in China, whether they are citizens or expatriates are afforded the same protections under the Labour Contract Law of the PRC regarding termination of employment. These protections were further augmented by the Ministry of Human Resources and Social Security on Improving the Handling of Issues in Labour Relationships During the Period for Protection and Control of Pneumonia from the Novel Coronavirus Infection which governs individuals who are unable to work normally as a result of government quarantine measures or other emergency measures. These measures were enacted on the 24th of January prior to the current travel restrictions, so it is unclear as of yet whether “other emergency measures” will apply in this scenario.

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