CHINA Law and Practice Contributed by: Liu Cheng and Li Yumeng (Audrey), King & Wood Mallesons
3.8 Review Process There are two stages that a merger filing will go through with SAMR: a pre-acceptance phase and a formal review phase: • Pre-acceptance phase, ie, from the initial filing until SAMR considers that the filing documents are complete and accepts the filing and starts the formal review. There is no definite period for the pre-acceptance phase under the law. In practice, it normally takes one to two months. • Formal review phase, which includes: (a) Phase I review (“Phase I”), which spans a maximum of 30 calendar days from the date on which SAMR informs the notify - ing party in writing that the filing has been formally accepted; (b) Phase II review (“Phase II”), which spans a maximum of 90 calendar days from the date on which SAMR informs in writing of the beginning of Phase II; and (c) Phase III review (“Phase III”), which extends the review for another 60 calen - dar days under certain circumstances. Based on past experience, for a transaction without competition concerns, if filed under the normal procedure, it normally takes about three to six months from the initial filing to get clear - ance; and if filed under the simplified procedure, it normally takes about one-and-a-half to two months from the initial filing. From the implementation of the AML Amend - ments to 30 September 2024, average review times were 25.42 days for cases involving state- owned enterprises, 24.72 days for cases involv - ing private undertakings, and 22.53 days for cases involving foreign undertakings.
the undertaking’s history of establishment and significant changes is no longer required. 3.6 Penalties/Consequences of Incomplete Notification As provided by Article 32 of the AML and Article 24 of the Provisions on Concentration Review, if the notification is deemed incomplete, SAMR may require the parties to submit additional doc - uments and materials within a specified period of time. If the parties fail to do so, SAMR is enti - tled to “stop the clock” and suspend the review period. 3.7 Penalties/Consequences of Inaccurate or Misleading Information If the parties intentionally submit inaccurate or misleading information, SAMR may not accept the filing application or revoke the acceptance decision for an already filed case, and may launch an investigation on relevant undertakings or individuals. The relevant undertakings may face a fine of up to 1% of the preceding year’s sales revenues, or a fine of up to CNY5 million if there were no sales generated in the preceding year. Rel - evant individuals may each face a fine of up to CNY500,000 or even criminal liabilities. In cases of severe violations, the penalties could escalate, ranging from two to five times the above-mentioned amounts. These penal - ties would be recorded in the businesses’ credit records, making the information available to the public. As of 31 December 2024, we are not aware of any public decisions in which these measures have been implemented.
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