State Administration for Market Regulation- Will improve the benchmark system for market supervision administrative penalty discretion

At a press conference held on October 14, the State Council Information Office’s Director Liu Wen announced that the Market Regulation Administration is set to release new guidelines aimed at reinforcing a people-oriented regulatory approach and implementing service-oriented law enforcement. The guidelines will focus on four key areas to further standardize regulatory practices.

First, the guidelines will detail the criteria for administrative penalties to ensure that punishments are proportionate to violations. This involves refining the penalty criteria system, promoting consistency across regions in administrative law enforcement standards, and implementing a system of guiding cases to unify enforcement measures. For minor violations, authorities will consider waiving penalties or applying lighter sanctions. However, for actions that pose significant risks to public health or safety, disrupt public interest, challenge ethical standards, or have severe social repercussions, strict penalties will be enforced.

Second, the administration aims to optimize enforcement methods to enhance the human aspect of law enforcement. This includes utilizing explanatory enforcement documents and clear communication to ensure that individuals involved in cases understand the violations, the grounds for penalties, and available appeal channels. The goal is to foster cooperation and understanding from those involved. The process will combine punitive and educational approaches, emphasizing pre-incident education, reasoned discussions during enforcement, and clarifications after decisions. Mechanisms will be established for post-case guidance, remediation checks, and assistance for those in need, encouraging individuals to fulfill their obligations and correct violations.

Third, the guidelines will seek to standardize daily regulatory practices to avoid unnecessary disruptions. The administration plans to implement a “double random, one open” approach, utilizing a database for both inspected entities and law enforcement personnel to randomly select subjects and inspectors. This strategy aims to eliminate redundant checks and excessive inspections. It will also enhance credit risk classification for businesses, applying risk levels to determine and adjust inspection frequencies and ratios dynamically, ensuring that businesses with good credit histories face minimal interruptions. Collaborative and comprehensive regulation across departments will be emphasized to achieve efficiency, allowing inspectors to cover multiple regulatory aspects in a single visit.

Lastly, the guidelines will boost legal awareness services to promote corporate self-discipline. Effective legal education will be central to regulatory enforcement, with a focus on preventing violations and supporting healthy business development. The administration will use education and administrative guidance to assist businesses in correcting issues and adopting preventive measures. It will encourage companies to enhance compliance frameworks and improve their legal awareness and operational integrity. By closely monitoring emerging issues within individual businesses, timely reminders and warnings will be issued to similar enterprises, reinforcing the importance of lawful operation across the industry.