The State Administration for Market Regulation recently issued the "Regulations on Administrative Punishment Discretion for Market Supervision and Management", which will come into effect on January 1 next year. This new regulation directly addresses the discretionary power in market supervision administrative penalties: for the first time, it distinguishes between lighter penalties and reduced penalties, and unifies the identification standards for common discretionary factors such as "first violation".
In the past, for the same type of illegal acts, the punishment results may be quite different in different regions and in the hands of different law enforcement officials. "Colleagues are punished differently" has always been a problem that business entities have focused on. The new regulations are to engrave a uniform scale on the "ruler" of law enforcement, so that every punishment is proportionate and lenient and strict.
So specifically, what is new about the new regulations? What is the purpose of distinguishing between lighter punishment and mitigated punishment for the first time? How should we determine the "no punishment for first violation" that everyone is concerned about?
According to the relevant person in charge of the Regulations Department of the State Administration for Market Regulation, the core purpose of the promulgation of the "Regulations" is to make the exercise of discretionary power rule-based and to make administrative penalties proportionate. Compared with the original system, the main features can be summarized as upgrading the effectiveness, subdividing levels and unifying standards. For example, the newly issued "Regulations" upgrade the discretionary rules from normative documents to departmental regulations, making the system more rigid and binding, and establishing a unified standard for national law enforcement.
Peng Xinmin, Director of the Regulations Department of the State Administration for Market Regulation: The core purpose is to make the exercise of discretionary power rule-based and achieve proportionality of penalties and penalties, which not only maintains the bottom line of supervision, but also creates a more fair, transparent and predictable legal business environment for business entities.
Let’s look at the stage breakdown first. To put it simply, the "Regulations" divide administrative penalty discretion into five levels: no punishment, reduced punishment, light punishment, general punishment, and severe punishment, and make specific provisions on the applicable circumstances of each level.
In particular, the mitigation and leniency situations that were easily confused in practice in the past have been set up separately this time, with the purpose of solving the problem of law enforcement officers "not daring to use it and not knowing how to use it."
Peng Xinmin: The standard is “a ruler”. The "Regulations" clarify key issues such as "who shall formulate, how to formulate, and how to manage" the discretionary standards for administrative penalties, and unify the identification standards of common discretionary factors such as "first violation", "minor violation" and "minor harmful consequences" nationwide to unify the discretionary scale to the greatest extent and ensure fair and just case handling.
The basis of discretion is the specific ruler for law enforcement, so who sets this ruler? The "Regulations" clarify that the State Administration for Market Regulation is responsible for formulating anti-monopoly and other benchmarks that fall under the jurisdiction of the General Administration; each provincial bureau is the main body in formulating benchmarks in the province; the municipal bureaus divided into districts are mainly responsible for local legislative setting matters, and can also formulate benchmarks for the city based on laws, regulations and superior standards. At the same time, it is required that the established discretionary benchmarks be disclosed to the public and dynamically updated, and the application of the discretionary benchmarks must also be stated in the administrative penalty decision document to improve transparency.
In reality, a case may have multiple circumstances including lenient and severe cases at the same time. In this regard, Article 19 of the "Regulations" provides a specific algorithm: first evaluate the impact of each situation, and if the impact is equivalent, the same situation will be superimposed and the opposite situation will be offset, and then determine the punishment; if the degree of impact is very different, the main factors must be considered and other situations must be taken into consideration. In addition, procedures must be "strictly controlled." For example, adjusting a lighter punishment to a reduced punishment must be decided through collective discussion by the person in charge of the department to prevent the abuse of discretion.
In addition, the reporter learned during the interview that lenient punishment and reduced punishment have been combined in the past. The new regulations distinguish the two for the first time, drawing a clear boundary for grassroots law enforcement.
Peng Xinmin: Many companies are particularly concerned about lighter punishments. In the past, the "Guiding Opinions" stipulated both lighter punishment and mitigated punishment together, and the boundaries were blurred. In practice, there was a problem of being afraid or unwilling to apply reduced penalties, or using and abusing reduced penalties. This time we have distinguished the applicable situations, made provisions respectively, and drawn the boundaries between lighter punishments and mitigated punishments.
So how to distinguish between lighter punishment and reduced punishment?
Article 14 of the "Regulations" clarifies that those who are coerced by others to commit illegal acts, take the initiative to eliminate the harmful consequences of illegal acts, voluntarily confess major illegal acts that have not been grasped by the market regulatory authorities, and cooperate with the market regulatory authorities to investigate and deal with illegal acts and have significant meritorious service shall be given a lighter administrative penalty;
Article 15 of the "Regulations" clarifies that those who are deceived by others to commit illegal acts, take the initiative to reduce the harmful consequences of illegal acts, voluntarily confess illegal acts that have not been grasped by the market regulatory authorities, and cooperate with the market regulatory authorities to investigate and deal with illegal acts and have meritorious service shall be given a lighter administrative penalty.
After talking about leniency and mitigation, let’s look at the highly concerned “impunity for first offense” issue. The "no punishment for first offense" system is an important system established in the Administrative Penalty Law. Its purpose is to implement the principle of combining punishment with education, to guide parties to correct minor violations through admonishment and education, and to prevent violations from occurring at the source. The new regulations also provide a unified definition of how to determine "no penalty for first offense" in specific administrative penalties.
Peng Xinmin: The "no penalty for first violation" policy that has attracted much attention was previously inconsistent with the standards of various places, making it difficult for companies to form stable expectations. This time we have unified the rules - the first offense refers to the first illegal act of the same nature within two years, but if it involves life, health, financial security and has harmful consequences, the interval is five years. Here, we particularly want to remind enterprises that breaking the law for the first time is not a "gold medal for immunity from fines", nor does it mean to indulge in violations. To not be punished, the three legal conditions must be met at the same time: first-time violation, minor harmful consequences, and timely correction. The three legal conditions are indispensable, and the first-time violation alone cannot directly exempt the person from punishment.
In the next step, the State Administration for Market Regulation will urge and guide all localities to revise and improve the discretionary benchmarks for administrative penalties, build a database of discretionary benchmarks, embed the discretionary benchmarks into the law enforcement case-handling system, use digital means to assist discretion, and promote unified law enforcement standards.
