MOU on the Implementation of Joint Discipline Against Entities Responsible for Violations of Laws and Untrustworthiness in the Accounting Field

Source: http://www.ndrc.gov.cn/zcfb/zcfbtz/201812/W020181225343072625628.pdf

The following Notice on efforts to strengthen credit oversight and management for untrustworthy entities is hereby given on the basis of the "Accounting Law" , "State Council Notice on the Issue of the Planning Outline for the Establishment of a Social Credit System (2014-2020)" (Guofa (2014) No. 21), the "State Council Guiding Opinion on Establishing and Improving a system of Joint Rewards for Trustworthiness and Joint Disciplinary Action Against Untrustworthiness to Accelerate the Establishment of Societal Creditworthiness" (Guofa (2016) No.33), and the "National Development and Reform Commission and People's Bank of China Guiding Opinion on Strengthening and Regulating Efforts on the Management of Joint Rewards for the Trustworthy and Joint Disciplinary Action for Untrustworthy Blacklist Targets" (FaGaiCaiJinGui(2017) No.1798) and other such documents; to accelerate the establishment of a credit system in the accounting field, to cultivate and practice the Core Socialist Values, to promote the formation of a strong united force to commend creditworthiness and punish untrustworthiness, and is released by the National Development and Reform Commission, People's Bank of China, Ministry of Finance, Organization Department of the CPCC, Publicity Department of the CCCPC, State Commission Office for Public Sector Reform, Civilization Office of the CPCC, State Internet Information Office, Supreme People's Court, Ministry of Science and Technology, Ministry of Industry and Information, Ministry of Civil Affairs, Ministry of Human Resources and Social Security, State-owned Assets Supervision and Administration Commission, State Administration of Taxation, State Administration for Market Regulation, Banking Insurance Regulatory Commission, Securities Regulatory Commission, All-China Federation of Labor Union, Communist Youth League Central Committee, National Women's Federation, and All-China Federation of Industry and Commerce et. al.

I. The targets of joint disciplinary action

The targets of joint disciplinary action primarily refers to accounting personnel with serious unlawful untrustworthiness who violate the "Accounting Law","Company Law", or "Securities Law", as well as other laws, regulations, rules, or normative documents in the course of accounting work, going against the principles of good faith and credit, upon designation by the Ministry of Finance or relevant department in accordance with law. (hereinafter simply "unlawfully untrustworthy parties in the accounting field")

II. Methods for Carrying out Information Sharing and Joint Punishment

The relevant departments and units making designations for joint disciplinary action lists are ro send information on unlawfully untrustworthy parties in the accounting fieto the Ministry of Finance through the national credit information sharing platform, and promptly update it. The Ministry of Finance is to go through the national credit information sharing platform to provide information on unlawfully untrustworthy parties in the accounting field to the other department and unit signatories to this memorandum. Relevant departments and units are to carry out punishments against accountants unlawfully untrustworthy parties in the accounting field in accordance with the content agreed upon in this MOU, and in accordance with laws and regulations. Establish mechanisms for periodic reporting on the efficacy of punishments, where relevant departments are to give feedback to the National Development and Reform Commission and Ministry of Finance through the national credit information sharing platform on the state of implementation for joint disciplinary action.

III. Joint Discipline Measures

(1) Fines, Restrictions on Engaging in Accounting Work, Pursuit of Criminal Responsibility, and other Punishment Measures

Accounting personnel with unlawful accounting behavior such as violations of the "Accounting Law" "Company Law" or "Securities Law", are to be given punishments such as fines and restrictions on engaging in accounting work; and where they are state employees, the unit to which they belong or relevant units are also to give administrative sanctions of removal from their position up to dismissal; and where a crime is constituted, criminal responsibility is pursued in accordance with law.

Implementing Units: The Supreme People's Court, Ministry of Finance, Securities Regulatory Commission etc.

(2) Recording in their accountant credit files

Include unlawfully untrustworthy parties in the accounting field's records of unlawful untrustworthiness in their accounting personnel files.

Implementing Units: Ministry of Finance, National Development and Reform Commission

(3) Disclosure to the public through the Ministry of Finance website, the "Credit China" website, and other primary news websites

Disclose information on unlawfully untrustworthy parties in the accounting field to the public through the Ministry of Finance website and the "Credit China" website, and concurrently coordinate with Internet news information service to disclose it to the public.

Implementing Units: The National Development and Reform Commission, Ministry of Finance, Central Internet Information Office

(4) Implement Industry Punishments

Support industry associations and chambers of commerce in giving punitive measures such as warnings, circulating criticisms, publicly censure, non-acceptance, and expulsion to untrustworthy members, on the basis of industry standards, rules, and agreements, and in light of the seriousness.

Implementing Units: Ministry of Finance, National Development and Reform Commission, Ministry of Civil Affairs, State Administration of Taxation, All-China Federation of Industry and Commerce, and other competent units and accounting industry organizations

(5) Restictions on obtaining practice credentials, and on obtaining authentication certificates

Restrict unlawfully untrustworthy parties in the accounting field from obtaining practice credentials, and their obtaining authentication certificates Strictly review their applications for eligibility to engage in securities, funds, or futures operations, and where they are already an entity of persons engaged in securities, funds, or futures operations, they are to be given heightened scrutiny.

Implementing Units: Securities Regulatory Commission, State Administration for Market Regulation

(6) Lawfully restrict participation in selection as outstanding or excellent and obtaining honorific titles

Lawfully restrict unlawfully untrustworthy parties in the accounting field participation in selection as outstanding or excellent and the receipt of honorific titles; where they have already received honorific titles, they may be revoked.

Implementing Units: Publicity Department of the CCCPC,Civilization Office of the CPCC, Ministry of Civil Affairs, All-China Federation of Labor Unions, Communist Youth League Central Committee, and the All-China Women's Federation, All-China Federation of Industry and Commerce et al

(7) Lawfully restrict service as the director, supervisor, or senior management of financial institutions

Lawfully restrict unlawfully untrustworthy parties in the accounting field from serving as the director, supervisor or senior management of banking financial instititutions, insurance companies, insurance property management companies, finance surety companies, and so forth, and also as seniro manager of insurance professional representative bodies or insurance agents or the principle responsible person for related branches, the chaiman, executive director, or senior management for insurance assessment companies' and make the records of their illegal untrustworthiness a consideration in the approval and recording of their serving as the director, supervisor, or senior management of securities companies, fund management companies, or futures companies, or as the responsible person of their branch organizations. Where they already so serve, lawfully issue an opinion that they no longer serve in the relevant position.

Implementing Units: Organization Department of the CPCC, Banking Insurance Regulatory Commission, Securities Regulatory Commission, Ministry of Finance, State Administration for Market Regulation, et al.

(8) Lawfully restrict their serving as the legal representative, director or supervisor of a state-owned enterprise

Lawfully restrict unlawfully untrustworthy parties in the accounting field from serving as the legal representative, director, or supervisor of state-owned enterprises, and where they already serve in related positions, lawfully issue a comment that they no longer serve in the relevant position.

Implementing Units: Organization Department of the CPCC, State-owned Assets Supervision and Administration Commission, Ministry of Finance, State Administration for Market Regulation, and so forth

(9) Restrictions on registration as the legal representative of public institutions

Regist unlawfully untrustworthy parties in the accounting field's registration as the legal representative of public institutions. Implementing Units: State Commission Office for Public Sector Reform

(10) Consideration in recruitment (hiring) as civil servants or public institution staff.

Make unlawfully untrustworthy parties in the accounting field's records of unlawful untrustworthiness a major consideration in their recruitment (hiring) as civil servants or public institution staff. Implementing Units: Organization Department of the CPCC, Ministry of Human Resources and Social Security

(11) Consideration in performance evaluations and selection of cadres

Make unlawfully untrustworthy parties in the accounting field's records of unlawful untrustworthiness a consideration in performance evaluations and selection of cadres.

Implementing Units: Organization Department of the Communist Party of China, State-owned Assets Supervision and Administration Commission

(12) Consideration in financial institutions credit financing

Make unlawfully untrustworthy parties in the accounting field records of illegal untrustworthiness an important consideration in evaluating credit extension, credit financing, management, and expulsion. Include Information on unlawfully untrustworthy parties in the accounting field in Basic Financial Credit Information Databases.

Implementing Units: People's Bank of China, China Banking Insurance Regulatory Commission

(13) Consideration by insurance establishments in setting property insurance rates

Make unlawfully untrustworthy parties in the accounting field's records of unlawful untrustworthiness a consideration in insurance establishments' setting of property insurance rates.

Implementing Units: The Banking Insurance Regulatory Commission

(14) Consider in revieiw and approval of insurance companies

Make unlawfully untrustworthy parties in the accounting field's records of illegal untrustworthiness a consideration in approvals or recording of modifications of insurance companies' equity rights, and actual controllers.

Implementing Units: The Banking Insurance Regulatory Commission

(15) Consideration in Tax Credit Management

In managing tax credit of unlawfully untrustworthy parties in the accounting field, lawfully make their untrustworthy status a prudential consideration and basis in the collection and assessment of their credit information.

Implementing Units: State Administration of Taxation

(16) Consideration in the approvals of the establishment of securities companies, fund management companies, or futures companies

For unlawfully untrustworthy parties in the accounting field, lawfully make entities responsible for untrustworthiness' records of illegal untrustworthiness a consideration in approvals or recording of modifications to securities companies', fund management companies', or futures companies' establishment, equity rights, and actual controller, or private investment fund managers registration, modification of major matter, and other fund recording. Implementing Units: Securities Regulatory Commission

(17) Consider in oversight and management during and after the fact of a domestic listed company's implementation of an equity incentive plan or making relevant personnel equity incentive recipients

Make unlawfully untrustworthy parties in the accounting field's records of untrustworthiness a consideration in oversight and management during and after the fact of a domestic listed company's implementation of an equity incentive plan or making relevant personnel equity incentive recipients.

Implementing Units: Securities Regulatory Commission

(18) Consideration in review of applications to engage in internet information services

Make unlawfully untrustworthy parties in the accounting field's records of unlawful untrustworthiness a major consideration in review of applications to engage in internet information services.

Implementing Units: Ministry of Industry and Information Technology

(19) Restriction on obtaining government subsidies and social security funding supports

Limit unlawfully untrustworthy parties in the accounting field's applications for government subsidies and social security funding supports.

Implementing Units: The National Development and Reform Commission, Ministry of Finance, Ministry of Human Resources and Social Security, State-owned Assets Supervision and Administration Commission, et al.

(20) Restrict participation research and management work in national science and technology projects

Restrict unlawfully untrustworthy parties in the accounting field's participation research and management work in national science and technology projects

Implementing Units: Ministry of Science and Technology

(21) Strengthening routine oversight, management, and inspection

Make unlawfully untrustworthy parties in the accounting field targets for key supervision, increase the extent of routine supervision, increase the rate and frequency of spot checks, and administrative oversight and management measures may be taken in accordance with laws and regulations.

Implementing Units: Each relevant unit

IV. Ongoing management of shared information

相关单位向财政部提供的会计领域违法失信当事人信息，以及财政部向各单位提供的会计领域违法失信当事人的违法失信信息，应注明决定作出的日期及效力期限，有关单位根据各自的法定职责，按照法律法规和相关规定实施惩戒或解除惩戒。 Where the effective period is exceeded, joint disciplinary action in no longer carried out.

会计领域违法失信当事人在规定期限内主动纠正违法失信行为、消除不良影响、履行信用修复相关程序的，可根据法律法规和相关规定从联合惩戒对象名单中退出，不再对其实施联合惩戒。 财政部应及时将有关信息提供给国家信用信息共享平台，各单位在作出解除惩戒的决定后，应及时将相关情况通过国家信用信息共享平台反馈至国家发展改革委和财政部。

V. Other matters

各单位应密切协作，积极落实本备忘录，制定违法失信信息的使用、管理、监督等相关实施细则和操作流程，并指导下级单位依法依职权落实对会计领域违法失信当事人的惩戒措施。 Specific operational issues involved in the implementation are to be settled individually by the units through consultation.