This article analyses the technical rules of the options and notifications in the Multilateral Instrument, the legal structure and the game-tree structure of the MLI, and the legal principle underlying the reservations entered into by selected contracting jurisdictions with respect to article 7 – Prevention of Treaty Abuse. With the aid of the game-tree structure, it also considers how the selected contracting jurisdictions apply the provisions in article 7 to the Covered Tax Agreements and the policy choices available to the policy makers. The author pays attention to specific bilateral relations, especially those involving China, Hong Kong and Singapore.