Chuck Peng, Head of KKMP’s China Practice, served as a guest expert in an exclusive in-house professional development program titled “Legal Regulation of Information Technology and Artificial Intelligence in the PRC.” The course was organized by the Faculty of Law at the National Research University Higher School of Economics specifically for the legal department of Sberbank PJSC.
Chuck took the discussion far beyond academic theory, providing participants with practical guidance on risk management tailored to large-scale commercial transactions. His sessions focused on licensing agreements under Chinese law: he analyzed in detail the provisions and regulatory “pitfalls” that lawyers at global corporations must know inside and out.
What the program covered:
- Fundamentals of licensing transactions in China. General principles, regulatory framework, and key concepts defining the structure of licensing transactions in China.
- Transaction Structure. How to draft a licensing agreement that is legally enforceable and which terms are essential for its validity in the event of a dispute.
- China-Specific Considerations. The requirement to register exclusive software licenses, antitrust restrictions on technology transfer, and the practical consequences of disregarding these rules.
- Cross-border complexities. Key aspects of international licensing agreements, with a focus on restrictions on cross-border data transfers, withholding tax on royalties, and foreign exchange controls.
This year, at the organizer’s request, two topics were covered in greater detail, directly addressing the needs of Sber’s legal team.
The true nature of a SaaS contract under Chinese law. Chuck guided participants through a long-standing classification issue: whether a SaaS contract is a license, a service, or something unique. He explained how Chinese courts and regulators look beyond formal labels to the economic substance, and why this classification determines everything—from intellectual property rights and termination provisions to data processing obligations and tax treatment. Participants received diagnostic tools they can use when drafting contracts and conducting due diligence.
Regulatory Requirements for International Licensing—Export Controls on AI Technologies and Cross-Border Data Transfers. A separate session was devoted to China’s rapidly tightening export control regime, including updated lists of dual-use goods and technologies, which increasingly cover AI algorithms, training datasets, and related software. Chuck described in detail when an export license or technical cooperation requires authorization, how to navigate the interagency review process, and which risk mitigation measures (such as source code isolation or the implementation of technical access controls) are viewed favorably by regulators. The analysis also examined the relationship between export controls and parallel restrictions on cross-border data flows—highlighting the overlap between the Export Control Act, the Data Security Act, and the Personal Data Protection Act as they apply to technology transactions and intellectual property protection within the Chinese regulatory framework.
“The Continuing Professional Development Center of the Faculty of Law at the National Research University Higher School of Economics (HSE) expresses its deep gratitude to the law firm ‘Kucher, Kuleshov, Maksimenko & Partners’ for developing course materials and conducting classes on the topic of licensing agreements under PRC law as part of the program ‘Legal Regulation of Information Technology and Artificial Intelligence in China.’ The module presented played a significant role in the curriculum. Students were provided with a coherent framework of knowledge regarding the legal system of the People’s Republic of China. The prepared material was characterized by well-thought-out logic and flexibility, which made it possible to transform discussions of complex legal provisions into a full-fledged professional dialogue.”
