National List of Basic Penalty Measures for Untrustworthiness (Draft for Solicitation of Comments)

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In order to implement the requirements of the "14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Outline of the Long-term Goals for 2035", the "General Office of the State Council's Guiding Opinions on Further Improving Systems for Restraining the Untrustworthy and Building Mechanisms for Building Creditworthiness that have Longterm Effect" (GuoBanFa(2020)No.49), the National Development and Reform Commission and People's Bank of China, in conjunction with relevant departments (units) have compiled and formed this National List of Basic Penalty Measures for Untrustworthiness, strictly based on laws, administrative regulations, and policy documents of the Party Central Committee and State Council. Each region and each relevant department (unit) shall strictly follow the laws and regulations to implement the penalty measures for untrustworthiness that are in the law and must not set up additional penalty measures beyond the provisions of laws, regulations, and policy documents of the Party central committee and State Council, must not expand the scope of targets for penalties on the list of their own accord, must not increase penalties beyond the legally-prescribed standards, to ensure that punishments for untrustworthiness operate on the path of law and to truly protect the lawful rights and interests of credit subjects.

1. Implementation of market or industry exclusions in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, carry out market or industry exclusions for a set period of time against market entities that have major conduct in violation of laws or regulations in a specified sector.

2. Implement professional bans or practice restrictions in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, carry out professional bans or practice restrictions for a set period of time against natural persons that have major conduct in violation of laws or regulations in a specified sector.

3. Restrictions on holding positions in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, prohibit natural persons that have major conduct in violation of laws or regulations in a specified sector from serving as the legal representative, board of directors member, board of supervisors member, senior management, or principle responsible person of related enterprises or public institutions for a set period of time.

4. Restrict relevant consumer behavior in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, limit high-spending and consumer behavior that is not necessary for the livelihoods or business of judgment defaulters and their legal representatives, principle responsible persons, persons directly responsible for the performance of debt obligations, and actual controllers for a set period of time.

5. Restrict or prevent exit from the country in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, prohibit or restrict exiting the country for a set period of time for judgment defaulters, taxpayers who have not settled taxes and late payment fees and have not provided a guarantee, as well as their legal representative; parties that have received customs punishments but have not paid the corresponding funds and have not given a guarantee, and their legal representatives and principle responsible persons; persons evading military service; as well as persons that laws on entry/exit management provide are not to be allowed to leave the country.

6. Restrictions on academic advancement to higher levels of school in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, restrict academic advancement to higher levels of school for a set period of time for natural persons with untrustworthy conduct such as evading military service.

7. Restrict applications for government fund programs in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, restrict market entities with untrustworthy conduct from applying for government fund programs for a set period of time.

8. Restrict the enjoyment of preferential policies and facilitation measures in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, restrict market entities with untrustworthy conduct from the use of government-funded benefit or support measures for a set period of time, restrict the use of tax benefits, restrict the purchase or lease of guaranteed housing, and do not use the notice and pledge system.

9. Restrict participation in award selections in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, revoke honors received by market entities with untrustworthy conduct and suspend or cancel their eligibility to participate in award selections for a set period of time.

10. Inclusion in lists of seriously untrustworthy entities in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, include relevant market entities in the lists of seriously untrustworthy entities for specified fields.

11. Sharing and publicly displaying information on untrustworthiness in accordance with laws and regulations

In accordance with the provisions of laws, regulations, and policy documents, share and publicly display information on the untrustworthiness of relevant market entities for a set period of time and within a set scope.

12. Inclusion in the scope of key oversight and management

In accordance with the provisions relevent policy documents, include market entities with untrustworthy violations of law that have a higher level of risk as the subjects of key oversight and management, appropriately increasing the ratio and frequency of spot checks.

13. Discretionary reference by government departments

In accordance with the provisions of relevant policy documents, relevant departments (units) are to refer to and use credit information in activities such as related administrative management and public services.

14. Discretionary reference by market entities

In accordance with the provisions of relevant policy documents, relevant market entities are to refer to and use credit information in economic and social activities.

Explanation

In order to implement the decisions and allocations of the Party Central Committee and the State Council on promoting the high quality development of a social credit system, and to standardize the implementation of punishments for untrustworthiness and to protect credit subjects' lawful rights and interests in accordance with the requirements of the "14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Outline of the Long-term Goals for 2035", the "General Office of the State Council's Guiding Opinions on Further Improving Systems for Restraining the Untrustworthy and Building Mechanisms for Building Creditworthiness that have Longterm Effect" (GuoBanFa(2020)No.49), the National Development and Reform Commission and People's Bank of China, in conjunction with the members of the interdepartmental conference on the establishment of a social credit system (hereinafter interdepartmental conference) have compiled this list, strictly based on laws, administrative regulations, and policy documents of the Party Central Committee and State Council.

2. "Penalties for untrustworthiness" as used in this list refers to activities carried out by state organs or organizations authorized by laws and regulations to have public affairs management duties (hereinafter "state organs") and other organizations using judicial, administrative, market, or other tactics to conduct punishment of entities responsible for untrustworthiness in accordance with laws and regulations.

3. The purpose of this list is to standardize and delineate the type of penalty measures for untrustworthiness and their targets.

Except as otherwise provided by laws, regulations, or policy documents of the Party Central Committee and State Council, state organs must not carry out penalties for untrustworthiness beyond the scope of this list. Organizations other than state organs carrying out penalties for untrustworthiness on their own accord, must not violate the relevant provisions of laws and regulations.

4. There are 14 penalty measures for untrustworthiness, broken into 3 types, included in this list: The first is measures by which state organs implement reductions of a credit subject's rights and interests or increase their obligations in accordance with laws and regulations, such as restricting entry in a marketplace or industry, restrictions on holing positions, restrictions on spending, restrictions on exiting the country, restrictions on promotion to a higher level of schooling, and so forth; second is management measures that state organs need to implement to perform their duties, that do not involve reductions of credit subjects' rights and interests or increasing their obligations, such as restricting applications for government fund projects, restricting participation in awards selections, restricting enjoyment of beneficial policies and facilitation measures, inclusion in lists of seriously untrustworthy entities, sharing or publicly displaying information on untrustworthiness, and inclusion in the scope of key regulation; Third is measures implemented by organizations other than state organs, such as inclusion in marketized credit-reporting or rating reports.

5. Where local regulations have special provisions on penalty measures other than those provided for in this list, the local unit leading the establishment of the social credit system, in conjunction with relevant departments (units) may implement supplemental lists based on local regulations to be used only in that region.

6. When compiling supplemental lists, each region is to have local regulations as their strict basis, widely solicit the opinions of all relevant local departments (units) and market entities, industry associations and chambers of commerce, legal service bodies, experts and scholars, and the societal public; and send a copy of the directory to the National Development and Reform Commission and People's Bank of China within 5 working days of completing the compilation, and disclose them on the "Credit China" website and the portal websites of the local people's governments.

7. State organs shall comply with the principles of legality, relevance, and proportionality, and implement the penalty measures included in lists strictly in accordance with law. Departments (units) must not set up punishments outside of laws, regulations, or policy documents of the Party Central Committee or State Council, or increase the legally prescribed standard for punishment on the grounds that the force of the current punishment for untrustworthy conduct is insufficient, must not expand the scope of punishments of their own accord, and must not increase penalties beyond the legally-prescribed standards. Where the above requirements are violated, the responsibility of the relevant units and persons is to be pursued in accordance with laws and regulations.

8. This list, in principle is to be updated annually. Where laws, regulations, or policy documents of the Party Central Committee and State Council make new provisions on penalty measures for untrustworthiness, those provisions are controlling. Updates of local supplemental lists of penalty measures for untrustworthiness are to be updated with reference to the requirements above.

9. This list is to be implemented from ____ 2021.

Punishment Measures for Untrustworthiness and their Basis in Laws and Policies