CHINA Law and Practice Contributed by: Jihong Chen, Zhong Lun Law Firm
keep any personal and private information that becomes known to them during an inspection confidential. To oversee the administrative proceedings initi - ated by the CAC, the Provisions on Administra- tive Law Enforcement Procedures of Cyberspace Administration Departments (“Enforcement Procedures”, 网信部门行政执法程序规定 ) came into effect on 1 June 2023, and set the rules on juris - diction, evidence, enforcement, etc. In addition, the Provisions on Administrative Penalty Proce - dures for Industry and Information Technology Authorities ( 工业和信息化行政处罚程序规定 ) came into effect on 1 September 2023, emphasising the transparency of enforcement activities and pro - tection of the penalised/inspected parties’ lawful rights and interests. Calculation of Administrative Fines The competent authorities will determine the amount of any fine on a case-by-case basis, taking into consideration the severeness of the violating acts, infringements of legitimate rights and interests on individuals, any adverse impact on society, etc. According to Article 34 of the Law on Administrative Penalty, the administra- tive authorities may, in accordance with law, for - mulate discretion benchmarks for administrative penalties to regulate the exercise of such discre - tion. Such discretion benchmarks for adminis - trative penalties shall be made public. Under the PIPL, the penalties for violations may include an order of rectification, warning, con - fiscation of illegal earnings, or the suspension or termination of apps or services. For severe violations, the violator may be fined up to CNY50 million or 5% of its turnover of the previous year at the company level, and the person directly in charge will be fined up to CNY1 million. The
company’s business licences and permits may also be revoked. Depending on the nature and severity of the vio - lation, different sanctions and penalties may be imposed by the CSL. For instance, non-com - pliance with the provisions related to PI protec - tion under the CSL may result in orders to take rectification measures, warning, confiscation of illegal earnings, fines or a combination of these. The fine imposed should exceed the amount of illegal earnings but may not exceed ten times such earnings; if there are no illegal earnings, the fine may not be more than CNY1 million. The person directly responsible may be subject to a fine ranging from CNY10,000 to CNY100,000. In the case of a severe violation, the competent authority may order the suspension of related business, require the violators to undergo rectifi - cation, the shutdown of a website, and the revo - cation of the business licence of the operator or provider. It is worth noting that the revised draft of the CSL, released in September 2022, has increased the upper limits of the fines to align with those prescribed under the PIPL. For severe violation, the amount of the fine may be up to CNY50 million or 5% of the violator’s turnover in the previous year, and the person directly in charge may be fined up to CNY1 million. The Enforcement Procedures set forth the fol - lowing rules. • A single illegal act shall not be subject to more than two fines. In cases where the act violates multiple legal provisions and should be sanctioned with fines, punishment shall be given in accordance with the provision on the high amount of fines. • Administrative punishments may not be imposed if the violation was first-time and minor, the harmful consequence was minor,
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