Guiding Opinions on Further Regulating the Scope of Inclusions in Public Credit Information, Punishments for Untrustworthiness, and Credit Restoration to Build Long-term and Effective Mechanisms for Establishing Creditworthiness (Draft for Solicitation of Public Comments)

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The Party Central Committee and the State Council place great importance on efforts to establish a social credit system. Each region and department is to follow the decisions and arrangements of the Party Central Commission and State Council to firmly promote the establishment of the social credit system, giving play to its active role in strengthening social awareness of creditworthiness, supporting the reform of 'streamlining administration and improving services' and optimizing the business environment. The following Opinions are put forward so as to thoroughly implement the requirements of the fourth plenum of the 19th Party Congress to "improve long-term effective mechanisms for the establishment of creditworthiness", to earnestly implement the "Regulations on Optimizing the Business Environment", to further clarify the scope of credit information, to carry out credit punishments in accordance with laws and regulations, to improve credit restoration mechanisms for untrustworthy entities, and to increase the level of legality and regulation in the establishment of the social credit system.

I. General Requirements

With Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as a guide, comprehensively implement the spirit of the 19th National Congress of the Communist Party of China and the 2nd, 3rd and 4 th Plenary Sessions of the 19th Central Committee, adhere to the general tone of steady progress; the overarching idea of acting in accordance with laws and regulations, national unity, prudence and moderation to protect the rights and interests; further standardizing and improving the mechanisms for designating, recording, collecting, sharing, disclosing, punishing and repairing untrustworthy conduct; and promote the social credit system to enter a new stage of high-quality development, better giving play to the active role of the social credit system in areas such as supporting the reform of “streamlining administration and improving services” and the transformation of government services and creation of a fair and creditworthy market order environmnet and social environment.

In promoting the establishment of the social credit system and in exploratory practice, the following important principles should be grasped: strict compliance with laws and regulations; the vital interests of individuals, enterprises, and all other entities related to the recording of untrustworthy conduct, designations for the lists of seriously untrustworthy conduct, and punishments for untrustworthiness must be strictly based on laws, regulations, or decisions and orders of the State Council. Ranges should be correctly defined, correctly defining the scope of credit information and designations for the lists of seriously untrustworthy conduct, having a reasonable understanding of punishments for untrustworthiness, to resolutely preventi inappropriate expansion and abuse. To ensure that punishments are proportionate, implement different types and degrees of punishment in accordance with the sector in which misconduct occurred, the severity of the circumstances, and the degree of impact, to truly protect the lawful rights and interests of credit entities. Drawing from international experience should be emphasized, basing ourselves on China's national conditions, and also fully referencing international practice; to cautiously promote the establishment of credit systems in sectors of high social concern or where there is not yet a consensus understanding, and promote relevant measures being in line with international standards.

II. Rationally Delineate the Scope and Procedures for Inclusion of Credit Information

(1) Clearly delineate the scope of credit information. The inclusion of information on specified conduct known to administrative organs as public credit information must be strictly based on laws, regulations, or decisions and orders of the State Council, and managed in accordance with the national unified public credit information catalog. The leading units of the inter-ministerial conference on the establishment of a social credit system (hereinafter interministerial conference) are to collaborate with relevant departments in editing and periodically updating the catalog, and the member units of the interministerial conference and other relevant departments may submit suggestions for inclusions in the catalog in accordance with laws and recommendations; and the leading units of the interministerial conference are to organize and consolidate the catalog, soliciting the opinions of each region, each department, relevant market entities, industry associations and chambers of commerce, legal service establishments, experts, scholars, and the public, and request that the interministerial conference organize implementation and public announcement after the deliberation and approval.

(2) Strictly regulate the basis for identifying untrustworthy conduct. Administrative organs designations of untrustworthy conduct must have legally effective documents as their basis. Acceptable bases for designation of untrustworthy conduct include: Effective judicial rulings and arbitration documents, decision documents from administrative acts such as administrative punishments and administrative verdicts; as well as other documents that laws, regulations, or decisions or orders of the State Council provide may be the basis for designating conduct as untrustworthy. After administrative organs designate conduct as untrustworthy, they shall truthfully record the information on the untrustworthiness.

III. Regulate the scope and procedures for sharing and disclosing credit information in accordance with laws and regulations

(3) Regulate the scope and procedures for sharing of credit information. Whether public credit information may be shared and what type of range to share it in shall be determined on the basis of the principles of legality and necessity, and indicated together when drafting credit information catalogs. Improve mechanisms for information sharing, promoting interconnectivity and data sharing between the national credit information sharing platform, the national enterprise information announcement system, as well as relevant departments' credit information systems, indicating the name of the collecting department, so that collection and full sharing are accomplished in one move.

(4) Determine the scope of credit information disclosures in accordance with laws and regulations. Whether public credit information may be disclosed shall be determined based on the principles of legality and necessity, and indicated when credit information catalogs are being drafted. The disclosure of public credit information must not encroach on enterprises' commercial secrets or personal privacy, except as otherwise provided by laws and regulations. Where information related to individuals is disclosed, there must be a clear basis in laws, regulations, or decisions and orders of the State Council, or be upon the consent of the individual, and sensitive information is to be processed to remove sensitivity as needed.

(5) Strengthen overall management of channels for the disclosure of credit information. The departments designating public credit information shall follow open government information or other provisions to disclose the information on the portal website for that department or level of government, or other designated websites. The 'Credit China' website and national enterprise credit information announcement system are to conduct uniform disclosure of all public credit information they have gathered which is required to be disclosed in accordance with relevant provisions, and remain consistent with the content and timing for disclosures by the departments designating credit information.

IV. Regulate Standards and Procedures for Making Designations for Lists of the Seriously Untrustworthy

(6) Strictly limit the scope in setting lists of the seriously untrustworthy. Strictly follow the provisions of "The State Council Guiding Opinions on Establishing and Improving Systems of Joint Incentives for Trustworthiness and Joint Disciplinary Action for Untrustworthiness and Accelerating the Establishment of the Social Credit System" Guofa (2016) No. 33) to restrict the scope of lists of the seriously untrustworthy to seriously untrustworthy violations of law that endanger the public's physical health and security in their lives, seriously undermine the order of fair market competition, refusals to perform legally-prescribed obligations seriously impacting the credibility of the judicial and administrative organs, and refusals to perform national defense obligations, and so forth. Absent a basis in laws, regulations, or decisions or orders of the State Council, departments (units) must not add or expand the scope of a list of the seriously untrustworthy.

(7) Strictly regulate standards for making list designations. Relevant sectors' designations for the lists of the seriously untrustworthy are to implement uniform national standards. The designation standards shall be set in the form of laws and regulations, and those that temporarily lack the capacity may have the competent (regulatory) department for that sector set them in the form of department rules. The designation standards shall fully solicit the comments of the units leading the interministerial conference, other relevant departments, relevant market entities, industry associations and chambers of commerce, legal service establishments, experts, scholars, and the societal public, with an open period for solicitation of comments of not less than 30 days. Designation standards are to be disclosed through the "Credit China" website and the websites designated by the competent (regulatory) departments for that sector. Designation standards shall also specify the conditions and procedures for removal, as well as relief measures. The departments drafting designation standards shall periodically organize third-party assessments of the efficacy of implementing the standards and dynamically adjust and improve them.

(8) Strictly perform procedures for list designations. In principle, lists of the seriously untrustworthy shall be set according to standards by administrative departments at the county-level or above, and where administrative organs at the provincial level or lower make designations for the lists of the seriously untrustworthy, they are to be reported to the provincial-level competent (regulatory) department to be re-examined when truly necessary, except where otherwise provided by laws, regulations, and departmental rules. Before administrative organs make decisions on designations for the lists of seriously untrustworthy persons, they shall inform parties of the matter and basis on which a decision is being made and the rights that the parties enjoy in accordance with law; and where the parties submit objections, they shall review and verify it and respond on the outcome within the set period of time. Decision documents shall be drafted for designations for lists of the seriously untrustworthy by the department making the designation, indicating the reasons and basis for the party's entry to the list, a warning of the punishment measures for untrustworthiness, the requirements and procedures for removal, as well as remedial measures and the like, and the decision document may be independently drafted or it may be included in the content of relevant administrative decision documents.

V. Carry out Credit Punishments in Accordance with Laws and Regulations

(9) Determine punishment measures for the untrustworthy in accordance with laws and regulations. The adoption of punishment measures that reduce their rights or increase the obligations of untrustworthy entities must be rooted in the specific facts of the untrustworthy conduct and directly cite the existing clauses of laws, regulations, or decisions and orders of the State Council on which it is based, and be implemented in accordance with the uniform national list of measures. The list of measures is to be drafted and periodically updated by the units leading the interministerial conference together with relevant departments, and member units of the interministerial conference and other relevant departments may submit recommendations on punishments measures for the untrustworthy, with the units leading the interministerial conference organizing and consolidating the list and soliciting the opinions of each area and each department, relevant market entities, industry associations and chambers of commerce, legal service establishments, experts, scholars, and the societal public, and organize the implementation and publication after deliberation and approval by the interministerial conference. Departments (units) must not compel financial establishments, credit service bodies, industry associations and chambers of commerce, news media, and so forth to punish untrustworthy entities.

(10) Ensure punishment measures correspond to the untrustworthy conduct. In accordance with the principles of legality, relativity, and proportionality, and with the national uniform list of punishments for the untrustworthy, adopt punishment measures with the appropriate degree of severity based on the nature and seriousness of the untrustworthy conduct, to prevent overpunishment of small infractions. Departments (units) must not arbitrarily set up punishments outside of laws, regulations, or decisions and orders of the 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.

VI. Establish and Improve Mechanisms for Restoring Credit Regarding Untrustworthy Conduct

(11) Establish and complete supporting mechanisms for credit restoration. The relevant competent (regulatory) departments shall establish credit restoration mechanisms that are conducive to self-correction and turning over a new leaf. Where untrustworthy entities request to correct untrustworthy information and eliminate negative effects, they may always apply for credit restoration, except for information on untrustworthiness that laws, regulations, or decisions and orders of the State Council provide cannot be restored. Where eligible for restoration, the relevant departments (units) shall follow the relevant provisions to promptly remove them from the lists of the seriously untrustworthy, stop sharing of the information on trustworthiness, or delete it.

(12) Increase the efficacy of credit restoration. Accelerate the establishment and improvement of mechanisms for coordinated links and the "one-site handling" to truly resolve the problem of "credit restoration" being difficult. The competent (regulatory) departments for relevant sectors, as well as the national credit information sharing platform and the "Credit China" website, shall indicate designated personnel responsible for credit restoration efforts and shall complete handling of eligible applications for credit restoration within the time limit promised in advance, and must not collect fees in any form from credit entities applying for credit restoration.

VII. Strengthen Credit Information Security and Privacy Protections

(13) Strengthen credit information security management. All levels of public credit information system should clarify the scope of authority and procedures for inquiries into information, and establish and improve registration and review systems for information inquiries to prevent information leaks, and where information is leaked either intentionally or due to job errors, the responsibility of relevant units and employees should be strictly pursued in accordance with law. Strictly investigate leaks, alterations, and theft of credit information or use of credit information to seek personal gain, strict combat illegal conduct such as the illegal collection or sale of credit information in the name of establishing the social credit system.

(14) Increase the force of protections for personal privacy. Each region and department shall follow the principles of legality, justness, necessity, and minimization to collect and use credit information in strict accordance with the national uniform public credit information catalog, clearly indicating the goals, methods, and scope of information collection and use, and having the individual's consent, except as otherwise provided by laws and regulations. It is prohibited for any unit and individual collect and use personal credit information without authorization, by compelling authorization, or having a single permanent authorization. Expand the force of investigation and handling of conduct such as the illegal acquisition, broadcast, use, or leaking, modification, or sale of personal information. Relevant departments should carry out key management of financial institutions, credit reporting bodies, internet enterprises, big data enterprises, and mobile application development enterprises, strictly regulating their conduct such as the collection, provision, and use of personal information.

VIII. Strive to Strengthen the Establishment of Credit Law

(15) Accelerate and promote the establishment of laws and regulations on credit. Persist in being "application-oriented and having legislation first", accelerate research to promote of laws and regulations on social credit, straighten out the relationship between punishments for untrustworthiness and administrative punishments, and consolidate the foundation of the rule of law. Where the force of punishments against untrustworthiness in current laws and regulations is insufficient and it is truly necessary to increase the force of punishment, each region and relevant department shall promptly submit suggestions on revisions to ensure that punishments for trustworthiness are carried out in accordance with law. The inter-ministerial conference should strengthen guidance of legislation efforts related to local social credit.

(16) Promote the establishment of the social credit system in strict accordance with laws and regulations. In accordance with the requirements of current laws, regulations or decisions and orders of the State Council, strictly regulate the scope of the collection, sharing, and disclosure for credit information; strictly standardize efforts on designations for the lists of the seriously untrustworthy, punishments for trustworthiness, and credit restoration work, to ensure that every piece of the establishment of the social credit system is done on the path of law. Resolutely investigate and handle all kinds of infringing acts, preserving the security of credit information, enterprise commercial secrets, and personal privacy in accordance with laws and regulations, and protect all kinds of credit entitites' lawful rights and interests in accordance with laws and regulations.

IX. Strengthen Safeguards for Organizational Implementation

Implement entity responsibility Competent (regulatory) departments for each industry should truly perform primary responsibility for credit oversight in that sector, completing efforts such as on designations, recording, aggregation, sharing, disclosure, punishment, and restoration of untrustworthy conduct, and the units leading the interministerial conference should coordinate with the judicial organs and other responsible units that have received clear authorization to do related work. All levels of local units leading the establishment of the social credit system should effectively perform their duties of planning and coordination, to strengthen regulation and guidance of that region's efforts to establish a social credit system.

Strengthen the pursuit of responsibility and accountability. The responsibility of relevant units and individuals should be pursued in accordance with law for recording, sharing, or disclosing credit information outside of that in the public credit information directory in violation of laws and regulations; for carrying out punishment measures outside of those in the list of punishment measures for trustworthiness in violation of laws and regulations; as well as for not promptly handling credit restoration in accordance with regulations

Strengthen publicity and explanations. All types of media are encouraged to carry out publicity and education on creditworthiness, thoroughly reporting on advanced examples of creditworthiness and trustworthiness and carrying out constructive public sentiment oversight of untrustworthy conduct and incidents to advocate creditworthiness and trustworthiness. Give full play to the role of relevant departments, experts and scholars, news media, and so forth in promptly elucidating credit policies, actively responding to the concerns from all sectors, strengthening positive guidance, and creating a positive public opinion environment.

Take hold of timing junctures. Each region and each department should follow the requirements of these Opinions to conduct a sorting and assessment of measures on designating, recording, aggregating, sharing, disclosing, punishing, and restoration of untrustworthy conduct and those that do not meet the requirements of these Opinions should promptly standardized and improved. A transitional period is to be set for systems of lists of the seriously dishonest that have a clear basis and can be retained, and before the end of 2021, update the list designation standards and procedures that require adjustment in accordance with these Opinions, with all those inconsistent with these Opinions abolished at the end of the transition period.