Meaning
Legal preservation measures in the Civil Procedure Law of the People’s Republic of China allow a party to secure assets or evidence prior to or during litigation. The process of baoquan prevents a counterparty from transferring disputed assets before a court issues a final judgment. It applies to bank accounts or real estate holdings held by the defendant within Chinese territory.
Judicial Application
Courts require a formal application and often a financial guarantee before granting a preservation order. This security deposit protects the respondent against losses if the claim of baoquan turns out to be groundless. Security is typically provided through cash, property, or a litigation preservation liability insurance policy from an approved domestic insurer.
Execution Procedure
Execution officers from the local people’s court carry out the asset freezing process directly after the judge signs the ruling. They send electronic freeze commands directly to banks or register the freeze with the municipal land bureau and the market regulation administration. The frozen status of bank accounts remains active for one year, while real estate freezes persist for three years.
Since these timelines are finite, a plaintiff must apply for extensions before the initial order expires to maintain the security.
Operational Limit
Foreign litigants must submit notarized and legalized power of attorney documents to initiate this protective mechanism. Because these administrative steps take weeks to complete, rapid emergency filings are difficult for overseas entities without pre-positioned legal representatives.
