Measures on the Administration of Market Regulation Credit Restoration (Draft for Solicitation of Comments)

by China Law Translate | 2024/05/13 9:55 AM

Article 1[Legislative Purpose] These Measures are drafted on the basis of the Provisional Regulations on Release of Information by Enterprises in order to strengthen the market regulation departments' management of credit restoration, to encourage parties to proactively correct illegal and untrustworthy conduct and eliminate adverse impacts and rebuild positive credit, to stimulate vigor in business entities, and optimize the business environment.

Article 2: [Scope, Methods] Based on these Measures, parties may apply for credit restoration for information on untrustworthiness that is displayed on the National Enterprise Credit Information Publicity System in accordance with law, such as lists of irregular business operations, Lists of the Untrustworthy with Serious Violations, displayed information on administrative punishments, and negative spot inspection result information.

“Parties” as used in these Measures includes business entities and relevant responsible persons that have received administrative punishments from market regulation departments, have been entered onto a List of the Untrustworthy with Serious Violations, have been listed as having irregular business operations, or that were subject to spot inspections by market regulation departments resulting in negative information.

“Credit Restoration Management” as used in these Measures includes removing parties from lists of irregular business operations or Lists of the Untrustworthy with Serious Violations, and stopping the display of related information on the National Enterprise Credit Information Publicity System; and stopping the display on the National Enterprise Credit Information Publicity System of information on administrative punishments and negative spot inspection result information.

Where market regulation departments grant credit restoration, they shall lift the corresponding management measures and promptly share information on the credit restoration with relevant departments through the National Enterprise Credit Information Publicity System.

Article 3: [Jurisdiction] The State Administration for Market Regulation is responsible for organizing and leading the work of managing credit restoration for the entire country. Local departments for market regulation at the county level or above are responsible for efforts to manage credit restoration based on these Measures.

Article 4: [Implementing Organs] All levels of market regulation department are to implement credit restoration management in accordance with the basic principle of “it being those who are punished who are entered on lists and who are responsible for credit restoration”. The market regulation department for a business entity’s place of registration (domicile) is responsible for managing credit restoration of irregular business operation lists. The market regulation departments that made the entry decisions are responsible for managing credit restoration for Lists of the Untrustworthy with Serious Violations. The market regulation departments that made administrative punishment decisions are responsible for managing credit restoration on displayed administrative punishment information. The market regulation department that carried out the spot inspections are responsible for managing credit restoration of negative spot inspection result information.

Where the market regulation department that made the decision is not within the same province, autonomous region, or directly governed municipality as the site of the parties' registration, they shall exchange relevant information with the market regulation department for the site of registration within 3 working days of making a decision, and that department is to assist in stopping the display of relevant information.

Article 5: [Conditions for Irregular Business Operations Directory Restoration] Parties that have been entered into the directory of irregular business operations or labeled as having abnormal business status, may apply for credit restoration in accordance with these Measures where they meet any of the following conditions:

(1) They supplement any missed annual reports and publicly display them;

(2) They have fulfilled instant information display obligations

(3) They have handled modifications of their domicile or business place registration in accordance with law, or the parties have submitted that they can again be contacted through the registered domicile or business place;

(4) They have made corrections to business names that did not comply with provisions related to the registration and management of business names, and registration of the modification is completed.

Article 6: [Conditions for Restoration of Lists of the Untrustworthy with Serious Violations] Where parties have been listed in the List of the Untrustworthy with Serious Violations for a full year and meet the following conditions, they may apply to the market regulation departments for credit restoration:

(1) They have conscientiously performed obligations provided for in the administrative punishment decision.

(2) They have proactively eliminated harmful consequences and negative impact;

Where parties receive another heavy administrative punishment from market regulation departments or where laws or administrative regulations provide that the period for carrying out corresponding management measures is not complete, they must not apply for credit restoration.

Article 7: [Conditions for Proactively Stopping the Display of Administrative Penalty Information] Where parties have any of the following circumstances, the market regulation departments are to stop the display of administrative punishment information:

(1) Three months have passed since beginning the display of administrative punishment information where the parties only received a circulation of criticism or lower value fine;

(2) Three years have passed since beginning the display of administrative punishment information where parties received an order to stop operations, restrictions on carrying out production or business activities, practice restrictions, reductions of qualification levels, cancellation of permits, or cancellation of business licenses, as well as other heavier administrative punishment provided for by the State Administration for Market Regulation.

Where, in accordance with laws and regulations, restrictions on carrying out business activities or on practice are to exceed three years, the display period is to be implemented in accordance with the actual time period.

Article 8: [Conditions for Stopping the Display of Administrative Punishment Information upon Application] Except where Article 7 of these measures provides for three months, parties meeting the following conditions may apply for credit restoration after one year for administrative punishment information in sectors such as food, drugs, medical implements, cosmetics, special equipment, and key industry products:

(1) They have conscientiously performed obligations provided for in the administrative punishment decision.

(2) They have proactively eliminated harmful consequences and negative impact;

(3) They have not received another administrative punishment from the market regulation departments for the same type of illegal conduct.

Where parties are entered into a List of the Untrustworthy with Serious Violations, they may apply for credit restoration of administrative punishment information after completing credit restoration of the List of the Untrustworthy with Serious Violations.

Article 9: [Concurrently stopping the voluntary disclosure of administrative penalty information] After market regulation departments make a credit restoration decision, they shall concurrently stop the display of administrative punishment information by the business entity.

Article 10: [Restoration of Negative Spot Inspection Result Information] Where negative spot check result information has been displayed for 3 years, the market regulation departments are to stop its display.

In sectors other than food, drugs, medical implements, cosmetics, special equipment, and key industry products, where negative information resulting from spot inspections involves orders to stop illegal conduct or orders to make corrections, then after the corrections are completed the parties may apply for credit restoration; where the parties were given administrative punishments because of negative information resulting from spot inspections, the display period for the negative spot inspection result information is to be kept the same as the display period for the administrative punishment information. Where credit restoration is completed for displayed administrative punishment information, the display of negative spot check result information is to be stopped at the same time.

Article 11: [Application Materials] Parties applying for credit restoration shall submit the following materials:

(1) the written application for credit restoration;

(2) Documents on applicant qualifications and proof of identification for natural persons;

(3) Trustworthiness pledges;

(4) Materials related to performing legally-prescribed obligations, correcting illegal conduct, and reporting on rectification;

Parties may submit applications by going to the market regulation departments or through the National Enterprise Credit Information Publicity System.

The market regulation departments shall make a decision on acceptance within 2 working days of receiving an application. Where the application materials are complete and comply with the format prescribed by law, they shall be accepted and the parties shall be notified. Where they are not accepted, the parties shall be notified and the reasons explained.

Article 12: [Verification Methods] The market regulatory departments may employ methods such as online or written verification to verify the parties' performance of legally-prescribed obligations, correction of illegal conduct, rectification, and other such conduct. When necessary, on-site verification may be conducted.

Article 13: [Restoration Decisions] Where parties apply for credit restoration in accordance with these Measures, the market regulation departments shall make a decision within 5 working days of accepting it.

Where the market regulation departments decide to permit restoration, they shall remove [the entity] from the directory of irregular business operations and List of the Untrustworthy with Serious Violations, and stop the display of related information. Where the market regulation departments decide to not permit restoration, they shall notify the parties and explain the reasons.

Article 14: [Legal Efficacy of Deregistration] Where a party unregisters or is forced to unregister, the market regulation departments are to automatically remove them from the directory of irregular business operations and List of the Untrustworthy with Serious Violations.

After a party unregisters or is forced to unregister, restrictions on holding positions that natural persons have received are to be implemented in accordance with the Company Law and other laws and administrative regulations.

Article 15: 【Incorporation of Information Technology】 The State Administration for Market Regulation and provincial market regulation departments shall rely on the National Enterprise Credit Information Publicity System to establish and improve a uniform platform for business entity credit restoration, to realize credit restoration management, information sharing, coordinated restoration, etc., and provide parties with efficient and convenient service.

The State Administration for Market Regulation is to draft uniform technical plans and data standards.

Article 16: [Coordination of Restoration and Information Sharing] All levels of market regulation department shall establish and improve mechanisms for coordinating credit restoration, making it so that data is shared between the National Enterprise Credit Information Publicity System and their information systems, and outcomes are mutually recognized.

Market regulation departments shall send relevant information to other departments through the National Enterprise Credit Information Publicity System within 3 working days of completing credit restoration. Market regulation departments shall stop the display or labeling of information on untrustworthiness on the National Enterprise Credit Information Publicity System within 3 working days of receiving information on credit restoration provided by other departments.

Article 17: [Revocation of Restoration] Where parties intentionally conceal the truth or make misrepresentations in credit restoration application procedures and the circumstances are serious, the market regulation departments are to revoke the decision to grant credit restoration or restore prior status. The period for the announcement of administrative punishment information and the List of the Untrustworthy with Serious Violations by the market regulation departments is to be recalculated. Further applications for credit restoration from that party are not be accepted within one year, and the revocation decision is to be displayed on the National Enterprise Credit Information Publicity System.

Article 18: [Notice of Decisions] The parties may be notified of the market regulation departments’ credit restoration outcomes through the business entity credit restoration platform, hard copy, or other means.

The business entity credit restoration platform shall provide a function to download credit restoration decision documents. Electronic proofs of credit restoration and hard copy proofs of credit restoration have equal legal force.

Article 19: [Credit Restoration where other Departments Requested List Entry] Where other departments requested that the market regulation departments make entries into List of the Untrustworthy with Serious Violations, then after receiving a party’s application for credit restoration, the market regulation departments shall promptly send it to the relevant department for verification and make a decision on restoration based on the relevant department’s recommendation.

Article 20: [Credit Restoration for Restructured Enterprises] Restructured enterprises or managers may apply for credit restoration with the market regulation department for their place of registration using their credit restoration application document and a people's court-approved restructuring plan ruling. The market regulation departments shall make a decision on credit restoration within 5 working days of receiving an application.

Article 21: [Situations for Not Granting Restoration] Where laws, regulations, and policy documents of the Party Central Commission or State Council provide that credit may not be restored, the market regulation departments are not to grant credit restoration.

Article 22: [Reconsideration and Litigation] Parties that are dissatisfied with the decisions of the market regulation departments on credit restoration may apply for an administrative reconsideration or bring an administrative lawsuit in accordance with law.

Article 23: [Oversight of the Performance of Duties] Where the market regulation departments do not perform duties in accordance with these Measures, a higher level market regulation departments shall order corrections. Managers who bear responsibility and other directly responsible personnel are to be handled in accordance with the Market Regulation Provisions on the Administrative Law Enforcement Responsibility Systems.

The collection of any fees during credit restoration is strictly prohibited.

Article 24: [Application of Law] These Measures apply to the management of credit restoration by the departments for drug administration. Where intellectual property rights management departments carry out efforts on the entry into Lists of the Untrustworthy with Serious Violations in accordance with the Market Regulation Measures on the Management of the List of the Untrustworthy with Serious Violations, credit restoration is to be carried out in accordance with these Measures.

Article 25: [Document Format] The State Administration for Market Regulation is to uniformly draft form documents such as market regulation department credit restoration applications.

Article 26: 【Effective Date】 These Measures are to take effect on XX/XX/2024.

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