Take it down! Stopping the display of “negative credit information”

Newly released measures on “Credit information restoration” clarify procedures for entities applying to end the public display of their negative credit information.  Public display of some negative information on government platforms, such as the Credit China website, is a major consequence of credit regulation in the social credit system, and the Measures further centralize and standardize control.

The negative information considered by these measures, and in the social credit system more generally, is limited to that listed in national and local directories of “public credit information”. Public credit information is defined as information collected or created by government departments during the normal performance of their duties, and the new measures focus specifically on two types of negative public credit information, namely: entry into industry blacklists of serious offenders (known as “lists of seriously untrustworthy entities”), and the receipt of administrative punishments.

The earlier rules that established the various industry blacklists were drafted by the relevant regulatory departments and contain fairly detailed criteria for making entry and removal decisions, as well as for the consequences of being listed. The new restoration rules leave these systems in place, with restoration going through the regulatory departments, and only adding that the “Credit China” website is to stop showing an entity as included on a list within 3 working days of a removal decision being made.

The rules have considerably more to say about information related to administrative punishments:

[Scope of display] Not all information about administrative punishments is publicly displayed. First, as the social credit system primarily applies to businesses and other organizations, information on the administrative punishment of individuals is, in principle, not to be publicly displayed. Second, even regarding organizations, information on small fines (up to 3,000RMB) and other punishments given on-site through the “simplified procedures” is not displayed at all, and information on the minor punishments of “warnings” and “circulated criticism” is not displayed regardless of the procedures used.

[Display period] The period for displaying information on administrative punishments is between 3 months and 3 years, although a minimum period of 1 year is required for punishments in areas related to public safety, such as the food, drug, production safety, and fire prevention sectors. This minimum display period must be completed before an application for restoration is considered, but display stops automatically at the end of the full period. Where the penalty itself includes a time period, display of information must be at least as long as that time period.

[Procedures for stopping display early]

Free applications to stop the display of information on administrative punishments can be made to the State Public Credit Information Center through the Credit China website. They must include materials showing that all obligations under the punishment have been fulfilled, such as by a statement from the department that gave the punishment. They must also submit a credit pledge that the materials they have provided are valid, and that they understand that violations of a pledge will themselves be recorded as negative credit information, and prohibit future applications for restoration for three years.

The state public credit information center is to accept applications that contain all materials. Incomplete applications will be given a single notice to supplement the missing materials within 3 working days, and then accepted or dismissed. After acceptance, a decision on whether to stop display of the relevant information is to be made within 7 working days.

[Other Procedures for challenging and correcting information]

In addition to stopping the display of information on administrative punishments, entities can of course also challenge the validity of punishment by either requesting an administrative reconsideration or initiating administrative litigation. While the display of the relevant information does not stop during these proceedings (unless ordered by the court or reconsideration organ) the display must be updated within 3 working days if the punishment is ultimately revoked or modified.

Where an entity finds that there are errors in displayed information on administrative punishments, that the display period has been exceeded, or that required changes were not made, they may address this through an appeal (申诉) to the State Public Credit Information Center, which will respond within 7 working days of receiving it, and update the displayed information as needed.

[Display by third-parties]

While the new Measures are primarily concerned with the public display of information on central and local government platforms, third party credit service establishments are required to update their information to ensure it is consistent with those government platforms. The state public credit information center is to conduct inspections to ensure compliance, and suspend or stop sharing information with those who do not update their data properly. While this may stop direct information sharing, the information is by its nature still made public for a period, and other rules will have to address the use of ‘out-dated’ credit information by third party credit establishments.