China’s State Council issued the Tentative Regulation on Publication of Enterprise Information (the “Regulation”) on August 7, 2014 requiring government agencies and enterprises in China to publish information about administrative penalties on public websites beginning on October 1, 2014. On August 19, 2014, another five sets of rules were issued by the State Administration for Industry and Commerce (the “SAIC”), detailing the requirements of the Regulation (the “Implementation Rules”). This will include unfair competition, antitrust, GMP and bribery settlements.
The major requirements for the publication of administrative penalty information under the Regulation and its Implementation Rules include:
- Within 20 working days after an administrative penalty is imposed, a company must publish the information on the Enterprise Credit Information Publication System (http://gsxt.saic.gov.cn), which is a centralized enterprise database run by the State AIC ( “ECIPS”).
- Local AICs must publish their administrative penalty decisions on ECIPS within 20 working days after such decisions are made.
- Other government agencies (e.g., the China Food and Drug Administration) must also publish their penalty decisions on ECIPS or other public websites.
- The information on ECIPS will remain publicly available for five years, and will contain the date, case number, key facts, legal basis and results of each administrative penalty decision.
- State secrets, individual private information and business confidential information cannot be disclosed on ECIPS without prior approval by the county AIC that publishes the information.
- If a company fails to publish information about a penalty on time, and fails to correct that deficiency, a local AIC could place it on the List of Enterprises in Abnormal Operation, or on the List of Enterprises in Serious Violation of Law.
Though it remains to be seen how the Regulation and its Implementation Rules will be enforced, they could significantly change multinational healthcare companies’ risk profiles under various listing blacklisting rules and affect strategies in administrative penalty proceedings such as AIC commercial bribery cases.
If you have any questions regarding this update, please contact the Sidley lawyer with whom you usually work or
Sidley China Life Sciences Practice
Sidley Global Life Sciences Practice
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