Map of the Guiding Opinion on Credit-based Regulation

by China Law Translate | 2019/09/19 4:56 AM

Recently a new phase of China’s Social Credit System has begun with the release of several documents on credit-based administrative regulation. The Social Credit system has focused primarily on business regulation since it’s start, and while there are some significant new mechanisms being introduced, the general focus and principles remain the same.

Other related documents in the series can be found HERE and HERE

Click on sections to expand

I. General Principles

II. Ex Ante (Prior) Regulation

(1) Credit Pledges
  1. Reduced permit processing time where pledges made to meet requirements
  2. Pledges can temporarily be used to supplement incomplete materials
  3. Pledge performance recorded, punishment for breaking pledges
  4. Gov. should indicate matters where pledges may be used, and create template pledges for routine use
  5. Encourage other pledges made to the public
  6. Encourage industry association pledge systems

Related Documents:

(2) Pre-permit education
  1. Use administrative filing, permitting, and other reviews as opportunity for education on compliance
  2. Must not collect fees for education
  3. Must not be a requirement for market entry
(3) Expand use of Credit Reports 信用报告
  1. Encourage market entities to rely on credit reports
  2. Gov. should rely on public and 3rd party credit reports for functions such as government procurement, approvals, permits, market entry/qualifications, etc.
  3. Explore creating standards for such credit reports, to allow cross-region recognition and use

III. Strengthening Credit Regulation During Operations

(4) Credit Records
  1. Establish directories of what credit information is to be collected,
  2. Collect market entity information in public administration activities.
  3. Improve affiliation of all public credit behind the uniform social credit code.
  4. Integrate complaint and report hotlines/sources; and make announcements and protect consumer rights
(5) Voluntary Registration of Credit Information
  1. Encourage market entities to register qualifications, contract performance, public interest work, etc. online; vouching for their accuracy.
  2. Such information may be considered in credit reports.
(6) Comprehensive public credit appraisals
  1. Collection and evaluation of public credit information from all departments.
  2. Promote use by departments, combining with departmental data.
(7) Hierarchical and Categorical Management
  1. Sort into levels (ranks) and types based on public credit information and appraisal outcomes.
  2. Increase or decrease frequency and thoroughness of inspections in light of credit levels. The general principle is 2 randoms 1 disclosure: random selection of inspection targets and inspectors, w/ public disclosure of outcomes - so this will allow some weighting.

IV. Ex Post (After the Fact) Regulation

(8) Designation of targets for punishment- Blacklists and Graylists
  1. Departments to establish systems based on earlier regulatory phases
  2. List is to include those with serious misconduct as indicated by judicial rulings, administrative action
  3. Implementation measures must include basis, standards, procedures for designation, and mechanisms for appeals, objections, and removals
  4. Comments should be solicited in drafting measures
(9) Urge corrections
  1. Black and Gray listed market entities should be urged to correct bad conduct
    1. Are to be spoken with if the fail to make corrections- and the talk entered into the nation credit sharing platform
  2. Carry out special enforcement in especially problematic fields
(10) Joint Punishments
  1. Try to create punishments that are effective across regions and departments etc
  2. Draft and publish list of possible punishments
  3. Punishments include:
    1. Limits on stock issuance,
    2. Limits in bidding and tendering
    3. financing
    4. Tax benefits
    5. Obtaining credit
(11) Market and industry entry restrictions
  1. Stronger penalties in fields that impact public safety and health
  2. Carry out time limited or lifetime entry bans for judgment defaulters OR those ignoring administrative punishments, recidivists, those that cause major harm, etc.
(12) Personal accountability of law breakers
  1. Make sure that corporations' legal representatives, actual controllers, and responsible parties are also held accountable.
  2. Where it is a gov. actor including SOE, public institutions, etc., the department above them is to be alerted; as is HR at the impacted unit
(13) Credit Restoration
  1. After bad conduct is stopped, market entities may restore credit through
    1. Pledges, corrections, verification, taking training, submitting credit reports, participating in public interest
  2. After restoration, will be removed from lists, and negative info taken down
  3. Streamline the process
  4. Encourage third parties to offer credit consultation services

V. Supports and Safeguards

(14) Digitalize Information
  1. Use national credit sharing platform and Internet+Regulation system to collect information and interconnect departments
    1. Use these systems to share information on entities' basic information and punishments received
    2. Work to synchronize information
(15) Improve information disclosures
  1. Release: administrative permits, punishments, designations, expropriations, payments, rulings, compensation, administrative rewards, oversight etc.
    1. Disclosed in 7 days!
(16) Internet+regulation and big data
  1. Integrate information from various sources above, making regulation traceable at every step
  2. Regions and departments are urged to cooperate in developing data
  3. Establish early risk-alert systems, detecting and stopping cross-field and cross-region risks
  4. Use big data to identify clues on violations of laws and regulations
  5. Encourage law enforcement to use new tech to minimize human factors, streamlining and making things fairer
(17) Information security, and protections of parties' rights and interests
  1. Investigate and punish leaks or improper altering of information
  2. Strengthen data protections
  3. Create systems for objections and complaints that require responses
  4. Agencies to eliminate the negative impact of mistakes in credit information
(18) Coordinate industry orgs and credit service establishments
  1. Encourage creation of industry org membership credit records, credit regulation credit pledges, training, etc. including it in association rules etc.
  2. Promote the development of various credit services
  3. Encourage government departments to cooperate with third-parties in creation/sharing/analysis of information

VI. Strengthen Organizational Implementation

(19) Organizational leadership
  1. Emphasize credit as part of streamlining and decentralization reforms
  2. Entity liability for regulatory agencies' credit actions and regulation
(20) Pilots and demonstrations
Hold pilots on furthering all the provisions in these rules
(21) New Rules
Speed up the drafting of new laws, regulations, and standards
(22) Publicity and Explanation
  1. Ensure that Market entities are aware of and cooperating with new credit regulation
  2. Strengthen training for regulators
  3. Organize media to report on new regulation
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