Economy

Rules to give access to spouses' asset records

By Cheng Yingqi (China Daily)
Updated: 2011-01-31 09:23

BEIJING - After she divorced her husband in 2008, Liu Ying found out by accident that, unbeknownst to her, her former spouse had bought mutual funds and had saved money in banks during their marriage.

The discovery led to a lawsuit against her ex-husband, Li Zhong. Speaking in his defense, Li claimed that part of the 85,000 yuan ($12,900) was borrowed from a friend, and the rest was his own savings.

The investigation into the facts of the case took years and only came to conclusion recently. Liu won in the end, receiving 34,560 yuan in cash, together with some mutual fund shares.

The denouement might have taken less time to reach if Liu had known about the hidden money before signing the divorce agreement.

But she had scanty means of learning more about her husband's finances. In most places in China, no specific law or regulation grants a married person access to a spouse's financial records without that spouse's consent.

But there are exceptions. On Jan 14, the Shandong provincial people's congress standing committee approved a regulation for the provincial capital Jinan, giving both husbands and wives their legal access to records listing assets possessed by their partners.

According to the regulation, which will take effect on May 1, the city's residents can come to local commercial, housing and vehicle management administrations to ask for documents showing properties owned by their spouses or vehicles registered in their spouses' names, among other information. Those who want to see the records must show either a marriage certificate or a permanent residence certificate.

"The regulation is based on the marriage law, which stipulates that property acquired during marriage shall be in the joint possession of husbands and wives, and indicates that both sides are responsible for reporting their financial standing to the other," said Jiang Yue, a law professor with Xiamen University.

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Shandong's new regulation follows the adoption of similar rules in Guangzhou, the capital of South China's Guangdong province. Guangzhou enacted its policy on June 1, 2010, sparking debate across the country.

"The regulation in Guangzhou does actually help the plaintiffs in matrimonial disputes," Jiang said.

According to Chinese law, plaintiffs have a given period of time, usually 30 days from when a divorce lawsuit is accepted by a court, to obtain evidence showing the amount of their assets that are held jointly with a spouse. But many of those who file for divorce end up losing possessions anyway, largely because their spouses have taken steps to conceal or transfer property.

Lu Mingsheng, a lawyer and member of the China Law Society, estimated that at least 50 percent of divorce lawsuits include disputes over property transfers or the concealment of assets. He said he doesn't think the new rules go far enough.

"It's a pity that the regulations only cover real property, vehicle or business holdings," Lu said. "The measure would be more effective if it opened a door to inquiries about bank accounts."

Chinese law prohibits financial institutions from releasing information from personal accounts to any organization or individual, including the spouses of account holders.

"A wife can never know how much money there is in her husband's bank account, unless she sues the husband and gets a warrant from the court.

"But if she can check the account in advance and block it before the money is transferred to somewhere else, then can she cut the losses," he added.