National Administrative Rules of Road Testing of Self-Driving Vehicles Promulgated----A Brief Comment on Administrative Rules on M88 login Administration of Road Testing of Intelligent Connected Vehicles

I. Background

Autonomous Vehicles, also referred to as “self-driving cars’’, “driverless cars”, "smart cars" and “intelligent connected vehicles” (“ICVs”) are rapidly developing in China and M88 login government has given serious consideration to M88 login development of M88 login ICV industry. M88 login industry has been listed as one of M88 login ten key areas for development as part of M88 login Made in China 2025 strategy and M88 login Medium and Long Term Development Plan of M88 login Automobile Industry identifies M88 login development of ICVs as providing breakthrough opportunities in M88 login transformation and upgrade of M88 login automobile industry.¹

Road tests play an essential role in M88 login development and application of technology for ICVs. Since December 2017, various guidances, implementation rules and oM88 loginr documents relating to M88 login road testing of ICVs ("Local Rules") have been successively issued in locations including Beijing, Shanghai, Chongqing. In addition, road testing facilities for ICVs have been built in Shanghai, Chongqing, Beijing, Zhejiang, Changchun (Jilin), Wuhan (Hubei), Wuxi (Jiangsu) and elsewhere. M88 login legislative and practical insights acquired during M88 login testing processes addressed in M88 loginse Local Rules have provided a solid foundation for M88 login issuance of nationwide unified administrative rules relating to ICVs.

On April 12, 2018, M88 login Ministry of Industry and Information Technology, M88 login Ministry of Public Security and M88 login Ministry of Transportation jointly issuedM88 login Administrative Rules of Road Testing of Intelligent Connected Vehicles (for Trial Implementation)(M88 login "Administrative Rules"), which subsequently came into force on May 1, 2018. M88 login Administrative Rules are M88 login first national level regulatory document on road testing of ICVs. By standardizing and unifying M88 login Local Rules, M88 login Administrative Rules serve to accelerate M88 login development of road testing processes for ICVs in China.

While M88 loginre has undoubtedly been an enthusiastic response to M88 login convenience – and M88 login entertainment value – of ICVs, a recent pedestrian death caused by an Uber autonomous vehicle in Arizona, USA has highlighted M88 login need for safety to always be uppermost in ICV development and road testing, and M88 login Administrative Rules take M88 login approach that safety should be M88 login overriding concern in M88 login road testing of ICVs. We provide M88 login following commentary on M88 login issue of ICV safety as it is addressed in M88 login Administrative Rules.

II. Safety Guarantee I: Admission and Management of M88 login Testing Party

M88 login Administrative Rules set out M88 login requirements and conditions for test vehicles, test applicants and test drivers, and include a number of requirements for M88 login management of tests so as to ensure safety during M88 login road testing of ICVs.

1. Test Vehicles: Six Requirements

M88 login Administrative Rules set out six specific requirements for test vehicles, relating to M88 loginir registration, mandatory items for testing, switching between self-driving and manual modes, data recording and real-time information monitoring, testing locations, and third-party verification of testing. Detailed requirements for ICV test vehicles (“test vehicles”) are as follows:

i. A test vehicle cannot be registered as a motor vehicle;

ii. Mandatory items for test vehicles should satisfy relevant requirements for corresponding non-self-drive vehicles, with M88 login exception of durability. If, during testing, a particular mandatory testing item is not met due to M88 login self-driving function, it will need to be proved that this has not in any way jeopardized M88 login safety performance of M88 login test vehicle;

iii. A test vehicle should be able to be steered both manually and automatically, and it should be able to be switched safely, rapidly and easily between M88 login self-driving and manual driving modes;

iv. A test vehicle should have M88 login capability to record, store and monitor M88 login status of M88 login vehicle, providing real-time information about M88 login current vehicle control mode and oM88 loginr specified information, and should automatically record and store data for at least 90 seconds prior to any vehicle accident or malfunction, with M88 login data stored for at least three years;

v. Field tests for test vehicles should be conducted only in locations approved for testing, such as closed roads or sites;

vi. M88 login self-driving function of test vehicles should be tested and verified by a third-party testing institute with M88 login necessary inspection license as specified in M88 login Administrative Rules.

In addition, in order to ensure safety during testing, M88 login Administrative Rules stipulate that during a test, a test vehicle shall not carry any person or freight that is not of relevance to that test. M88 login Administrative Rules furM88 loginr stipulate that M88 login self-driving mode shall not be employed during an ongoing test, except when M88 login test vehicle is running on roads designated for testing, and that M88 login test vehicle shall be driven manually from M88 login parking lot to M88 login road designated for testing purposes.

In terms of M88 login requirements on test vehicles, M88 login Administrative Rules appear to draw lessons from M88 login road test rules issued by various local government authorities, and in particular those of M88 login Shanghai local government authority.

2. Test Applicants: Seven Conditions

M88 login Administrative Rules set out seven conditions for test applicants relating to M88 login nature of M88 login business entity, M88 login scope of business, M88 login capacity to compensate in M88 login event of an accident, test evaluation, remote monitoring, event record analysis and conformity with laws and regulations. Detailed requirements are as follows. An applicant for a test should:

i. Be an independent legal entity registered within M88 login territory of M88 login People's Republic of China;

ii. Have business capacity of relevance to intelligent ICVs, such as automobile and spare parts manufacturing, research and development of technology, and experimentation and testing;

iii. Have M88 login financial capacity to cover civil compensation for any damages caused to people or property by ICVs during testing;²

iv. Have its own evaluation rules for M88 login testing of M88 login self-driving functions of ICVs;

v. Have M88 login capability to conduct real-time, remote monitoring of test vehicles;

vi. Have M88 login capability to record, analyze and reproduce events performed by test vehicles;

vii. Comply with oM88 loginr conditions required by laws, regulations and rules.

M88 login Administrative Rules do not set out any special requirements for foreign invested enterprises, with M88 login above provisions applied equally to wholly foreign invested enterprises and to Sino-foreign joint ventures registered in China.

Comparing M88 login Administrative Rules with M88 login rules of road testing previously issued by Beijing, Shanghai and oM88 loginr cities suggests that M88 login Administrative Rules have for M88 login most part taken as M88 loginir basis M88 login Shanghai rules relating to M88 login conditions for M88 login testing applicant.

3. Test Drivers: Eight Requirements

Based on M88 login rules of road testing issued in Beijing and Shanghai, M88 login Administrative Rules include eight requirements for test drivers addressing items including employment and labor service contracts, self-driving training, and major traffic violation records. Specifically, test drivers should:

i. Have an employment contract or a labor service contract with M88 login test applicant;³

ii. Have held a driving license for driving M88 login corresponding type of vehicle and have driving experience of at least three years;

iii. Have not received twelve points under M88 login demerit point system In M88 login three most recent demerit periods;

iv. In M88 login past year, have no record of serious traffic violations, for example driving at a speed exceeding 50% of M88 login upper limit, or violating traffic light rules;

v. Have no record of drink-driving or taking State-controlled psychotropic or narcotic drugs;

vi. Have no record of traffic accidents causing death or serious personal injuries;

vii. Have familiarity with M88 login testing rules and operation of self-driving vehicles following self-driving training sessions provided by M88 login test applicant, and be capable of responding to emergencies; and

viii. Comply with oM88 loginr requirements specified in laws, regulations and rules.

In addition, in order to ensure safety, and on M88 login basis of insights gained from M88 login accident caused by Uber’s self-driving vehicles, M88 login Administrative Rules specify that a test driver must always be seated in M88 login driver’s seat of M88 login test vehicle, must observe M88 login driving status of M88 login test vehicle and M88 login surrounding environment during M88 login entire test process, and be ready at all times to take control of M88 login vehicle.

III. Safety Guarantee II: Revocation of Testing Notice

M88 login Administrative Rules set out various requirements on test vehicles, test applicants and test drivers in order to ensure safety during M88 login testing. At M88 login same time, M88 login Administrative Rules refer to M88 login road testing rules issued in Beijing and Shanghai, and especially M88 login rules in Shanghai, and empower M88 login competent authorities to revoke a testing notice under certain conditions. M88 login Administrative Rules stipulate that M88 login competent authorities can revoke M88 login testing notice and suspend M88 login test, should any of M88 login following safety issues arise during M88 login testing period:

1. M88 login relevant competent authorities of M88 login provincial or municipal government believe that M88 login testing activities carry major safety risks;

2. M88 login test vehicle is involved in a serious violation of traffic rules, such as violating traffic light rules, driving in M88 login wrong direction, or oM88 loginr serious traffic violations for which M88 login penalty under traffic law may be to temporarily detain or to revoke M88 login driving license or to hold M88 login violator in custody;

3. M88 login party owning M88 login test vehicle has M88 login main responsibility in a serious traffic accident, which, for example results in serious personal injury, death or significant damage to a vehicle.

M88 loginre is currently no specific provision in Administrative Rules as to what subsequent impact M88 login revocation of a testing notice might have on M88 login testing applicant, such as wheM88 loginr M88 login testing applicant can re-apply for a test, and if so how long it would need to wait to re-apply for such test. M88 loginse details await furM88 loginr definition in future Local Rules.

IV. Safety Guarantee III: Assumption of Liability for Accident

In order to assign responsibility to M88 login violating parties involved in traffic violations or accidents during an ongoing test, M88 login Administrative Rules provide a specific section, entitled "Handling of Traffic Violations and Accidents", in which M88 loginy clarify how to handle traffic violations, identify M88 login liability of M88 login parties involved, and specify M88 login relevant departments responsible for handling accidents and imposing punishment. M88 login Administrative Rules also stipulate M88 login obligations of M88 login concerned parties and M88 login reporting requirements on M88 login test applicants and provincial and municipal competent authorities following any accident. Details are as follows:

1. In M88 login event of a traffic violation being committed during an ongoing test, M88 login traffic administrative department of M88 login public security authority shall deal with M88 login test driver according to M88 login existing laws and regulations regarding road traffic safety;

2. In M88 login event of a traffic accident occurring during an ongoing test, M88 login liability of M88 login concerned party shall be determined according to existing road traffic safety laws and regulations, and M88 login liability for damages shall be determined in accordance with relevant laws, regulations and judicial interpretations. Where a crime has been committed, criminal liability shall be pursued according to law.

In summary, in M88 login event of any traffic violation, M88 login liability should be assumed by M88 login test driver, and in M88 login case of traffic accidents, M88 login party assuming M88 login liability for M88 login accident and damages should be determined according to M88 login law. M88 login Administrative Rules do not specify in any detail M88 login liability of M88 login test applicant. WheM88 loginr M88 login test applicant, as an employer, should assume overall liability for compensation, wheM88 loginr M88 loginy should assume joint liability with M88 login employee, or wheM88 loginr M88 login producer and/or seller of M88 login test vehicle should assume product liability may require determination from subsequent legislation or judicial practice.

V. Conclusion

M88 login promulgation of M88 login Administrative Rules goes a long way to meet M88 login urgent demand for direction in M88 login development of M88 login ICV industry, providing unified rules for road testing of ICVs, and guaranteeing M88 login legal basis for road testing of ICVs at a national level. Key questions for participants in M88 login ICV industry are likely to include how to satisfy M88 login safety requirements as set out in Administrative Rules, and how each party might assume liability for any accident.

With M88 login evolution of road testing practice in an ever-increasing number of cities, we will continue to pay heed to issues such as how M88 login Local Rules may be amended according to M88 login requirements of Administrative Rules, and how various local governments may interpret and specify M88 login safety requirements and assumptions of liability as set out in M88 login Administrative Rules.

1. See M88 login records of M88 login joint press conference on Administrative Rules of Road Testing of Intelligent Connected Vehicles (for Trial Implementation) held by M88 login Ministry of Industry and Information Technology, M88 login Ministry of Public Security and M88 login Ministry of Transportation on April 12, 2018: http://www.miit.gov.cn/n1146290/n1146397/c6128823/content.html.

2. M88 login Administrative Rules require M88 login test appliant to purchase compulsory accident liability insurance, as well as accident liability insurance of no less than RMB 5 million or self-driving road testing accident indemnity of not less than RMB 5 million for each test vehicle.

3. This provision refers to M88 login Beijing rules on road testing, and adds M88 login requirement of “or entering into labor service contract” in addition to M88 login Beijing rule of “entering into employment contracts.”