“Administrative Penalty Law” has been implemented on July 15, 2021
The reversion of the “Administrative Penalty Law” (“Reversion”) is adopted at the 25th Session of the Standing Committee of the 13th National People’s Congress of the PRC on Jan. 22, 2021, and has been implemented on Jul. 15, 2021. The Reversion has amended many articles, and we chose some articles which are relevantly more important to enterprises for reference.
- “No penalty for the first time violation”
Article 33 of the Revision stipulates: “……Where an offender violates the law for the first time with minor harmful consequences and makes corrections in a timely manner, no administrative penalty may be imposed on him…….”. There are two aspects should be noted.
(1) Regarding the first time violation, in consideration of various factors, the administrative authorities may make the decision that no administrative penalty may be imposed; however, this does not mean that no administrative penalty may be imposed on all first time violations.
(2) The various factors include: the consequence must be minor harmful, and the offender has made corrections in a timely manner.
From the perspective of enforcement, if there is no quantitative standard for a “minor harmful consequence”, there might be different enforcement results. At present, some provinces and cities have published detailed quantitative standards. Such as, the “Shanghai Municipal Market Supervision and Administration Administrative Penalty Judgment Benchmarks (Trial)” was announced in early 2020, in which many quantitative standards have been prescribed, so local Shanghai enterprises could take this for reference.
- Time limit for accountability
Article 29 of the original “Administrative Penalty Law” stipulates that, “Where an illegal act is not discovered within two years of its commission, administrative penalty shall no longer be imposed, except as otherwise prescribed by law…….”The Revision adds a special time limit for accountability, which says, “Where an illegal act involves the life, health and safety of citizens or financial security and causes harmful consequences, the above period of time shall be extended to five years. This amended article has added special occasions which could be told as otherwise prescribed by law.”
- “One penalty one illegal act”
Article 24 of the original “Administrative Penalty Law” stipulates that, “For the same illegal act committed by a party, the party shall not be given an administrative penalty of fine for more than once.” Based on the aforesaid article, Article 29 of the Revision has further clarified the implementation of this principle, that is, “Where a fine shall be imposed for the same illegal act in violation of several legal norms, the higher amount of the fine shall be imposed.”
- “Prevalence of new law over old law and lenient penalties over harsh penalties”
Article 37 of the Revision stipulates that, “In imposing an administrative penalty, the provisions of the laws, regulations or rules in force at the time when the illegal act occurred shall apply. However, if the laws, regulations or rules have been revised or repealed at the time when the decision on administrative penalty is made, and the new provisions impose a lighter penalty or do not deem the act illegal, the new provisions shall apply.” This is a newly added article. Actually, early in 2004, the Supreme People’s Court has mentioned this principle in the “Minutes of the Symposium on Issues Concerning Applicable Legal Rules in the Hearing of Administrative Cases” (Fa [2004] No.96). However, this principle is added in a higher legislation level, which could drive all administrative authorities to implement this principle more voluntarily.