CHINA Law and Practice Contributed by: Liu Cheng and Li Yumeng (Audrey), King & Wood Mallesons
(a) There is an initial amount of CNY2.5 million, subject to several mitigating and aggravating factors. Mitigating factors, such as voluntarily reporting and volun - tarily taking corrective measures, may result in a lower initial amount of CNY1 million, while aggravating factors, such as obstruction of enforcement or refusal to co-operate, may result in a higher initial amount of CNY4 million. (b) On top of the initial penalty amount, each downward adjustment factor reduces the penalty by 10%, and such downward ad - justments may add up to no more than a 60% reduction; each upward adjustment factor increases the penalty by 10%-20%. Downward adjustment factors include: (1) no actual operation or production, or no effective exercise of control; (2) first-time offence; (3) proactive co-operation with the investigation, providing truthful state - ments of facts and important evidence; (4) proactive rectification, establishing or improving the antitrust compliance system and effectively implementing such system; (5) the concentration is above the thresholds yet the turnover of the under- taking within China in the previous fiscal year was below CNY800 million and the undertaking proactively co-operates; and (6) other factors determined by SAMR. Upward adjustment factors include: (1) providing misleading or false materials or information to SAMR; (2) adopting passive approaches such as delaying, slacking or evading, and thus failing to co-operate with the investigation or provide relevant materials; and (3) other factors deter - mined by SAMR. (c) SAMR will finalise the penalty amount considering the particularity of the case. Normally, all penalties imposed should be
subject to the maximum penalty amounts. In cases of severe violations, SAMR may at its discretion impose a penalty rang - ing from two to five times the maximum penalty amounts provided in the AML. • For cases with competition concerns, the penalty amount will be calculated in reference to the methods set out above, while consider - ing factors such as the duration and scope of the anti-competitive effects, efforts in rem - edying the illegal concentration, etc. • Undertakings may be exempted from admin - istrative sanctions in certain circumstances such as first-time offence plus voluntary reporting and restoring to pre-concentration status. SAMR has imposed such penalties against transactions implemented before clearance. For details please see 2.2 Failure to Notify . These penalties are made public by SAMR. Penalties have been imposed on foreign-to-for - eign transactions in recent years. 2.14 Exceptions to Suspensive Effect There are no express provisions within the AML providing for general exceptions to the suspen - sive effect. In practice, undertakings may inform SAMR of special circumstances, such as public bids, so as to accelerate the review process. There are no express provisions within the AML providing for a waiver or a derogation from the suspensive effect. 2.15 Circumstances Where Implementation Before Clearance Is Permitted Pursuant to Article 26 of the AML, the parties shall not close the transaction before clearance.
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