CHINA Trends and Developments Contributed by: Wei Yingling, JunHe LLP
their duties according to law or retaliating against any administrative law enforcement officers; • forging, concealing, destroying or transferring evidence. Adjustment range, mitigating circumstances and aggravating circumstances After determining the base fine, SAMR will miti - gate or aggravate the base fine if there is one or more mitigating or aggravating circumstances. SAMR will mitigate the base fine by 10% for each mitigating circumstance, but the adjusted fine shall not be lower than 40% of the base fine. SAMR will aggravate the base fine by 10% for each aggravating circumstance, but the adjust - ed fine shall not be higher than CNY5 million. (1) Mitigating circumstances (each by 10%, capped at 60%): • the post-concentration entity has not been operated yet, or has not been put into pro - duction after operation, or has not actually exercised control after acquiring equity, assets or businesses; • the undertaking is subject to administrative penalties for the first time for illicit concentra - tion; • the undertaking actively co-operates with SAMR in the investigation, truthfully states the illegal facts and provides critical evidence in a timely manner; • the undertaking actively rectifies after dis - covering the illegal facts, and establishes or improves the antitrust compliance manage - ment system and effectively implements it; • the concentration meets the notification threshold, but the undertaking’s turnover in China for the previous fiscal year did not reach CNY800 million, and the undertaking actively co-operates with the investigation.
(2) Aggravating circumstances (each by 10%, capped at CNY5 million): • providing misleading or untrue materials or information to SAMR; • adopting delaying, negligent, evasive or other negative means to refuse to co-operate with SAMR’s investigation or failing to provide relevant materials. For illicit concentrations that have or may have anti-competitive effects, SAMR will refer to the approaches and factors listed above, but no specific quantitative criteria are provided. None - theless, the Benchmark provides three circum - stances where SAMR shall directly impose a fine of 10% of the sales revenue in the previous year, including (1) where the concentration was imple - mented without approval after SAMR informed the undertakings of the concentration’s anti- competitive effects; (2) where the concentration was implemented in breach of SAMR’s prohibi - tion decision; and (3) other illicit concentrations maliciously implemented. Recent penalty decisions have reflected the above Benchmark Practically speaking, SAMR has published five penalty decisions that applied the amended AML, which generally reflects the application of the above Benchmark. Specifically: • One case involved the parties’ self-reporting before SAMR obtained any information, which counts as a lighter circumstance. In addition, SAMR found that the case had no aggra - vating circumstances while it had several mitigating circumstances. The final decision was to impose a fine of CNY700,000 on each party. • In the other four cases, SAMR found that the cases had no aggravating circumstances
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