“Regulations on the Administration of Recall of Defective Auto Products” (“Regulations”) will come into force on Jan. 1, 2013

“Provisions on the Administration of Recall of Defective Auto Products” (“Provisions”) comes into force in 2004, which is criticized for its legislation hierarchy, its contents lacking of practicality, its punishment is needed to be strengthened.

with Provisions, Regulations raises the legislation hierarchy to Administrative Regulations, and amends the following aspects: (a) increasing the amounts of punishment, for example, if the manufacturer hides the defects, or refuses to recall the auto products, the fine shall be calculated based on the percentage of the value of defective auto products, which means there is no maximized amount; (b) further stipulating the investigation rights and procedures for the administrative authorities; (c) requiring the manufacturer to undertake the cost to eliminate defects and the expenses for reasonable transportation; (d) generally stipulating the sharing system for information of auto products among the relevant departments.

However, Regulations has not specifically stipulated the system for independent appraisal institutes, the rules to deal with customers’ complaints, which are highly concerned by the public. Moreover, we still need more detailed provisions to regulate administrative authorities ‘initiative investigation, establish and administrate the information sharing system.