China updated the Anti-Trust Compliance Guidelines for Operators

I. Revision Background

In order to further implement the new Anti-Trust Law, which has come into effect in 2022, create a fair and competitive market environment, and promote the high-quality development of business entities, the Anti-Trust and Anti-Unfair Competition Commission of the PRC State Council released the newly revised “Anti-Trust Compliance Guidelines for Operators” (“2024 Guidelines”) on April 26, 2024. This revised edition significantly modifies the guidelines released in 2020, and it has been effective since its publication date. This article provides an interpretation of the key revisions and features of the 2024 Guidelines.

II. Revision Highlights

The main focus of the revisions to the 2024 Guidelines is to provide guidance for business operators and to include guiding cases for their reference. The key modifications to the 2024 Guidelines are as follows:

1. Expanding the scope of application of the guidelines, adjusting basic concepts of compliance management, and introducing principles of problem-oriented, pragmatic, and comprehensive coverage to assist business operators in strengthening their anti-trust compliance management.

2. Providing guidance for business operators to establish anti-trust compliance management organizations and clarifying the responsibilities of management bodies at all levels. Selected guidance cases: Enterprises may develop anti-trust compliance management systems according to business needs, establish anti-trust compliance committees, appoint chief compliance officers, and reinforce the anti-trust compliance responsibilities of principal officers of each business department in their respective business areas.

3. Elaborating the content of compliance risk management, providing scenario-based guidance for identifying anti-trust compliance risks, improving compliance risk management mechanisms, detailing and adding relevant compliance risk points and disposal measures. Specific guidance cases have been added to guide enterprises in establishing a comprehensive anti-trust risk assessment system covering the whole process of prior, during and after the event for risk identification and assessment.

4. Improving the operational safeguards for compliance management, adding practical operational and reporting mechanisms, enhancing the targeted nature of compliance training, and encouraging business operators to support compliance work. Selected guidance cases have been added to clarify that companies may establish anti-trust compliance review and reporting mechanisms, regularly report anti-trust compliance risks and progress, and form annual compliance assessment reports. Additionally, a reporting system has been specifically established for significant contracts involving anti-trust risks.

5. A new chapter has been added to introduce anti-trust compliance incentive mechanisms. It specifies the applicable circumstances and application procedures for compliance incentives at different stages of anti-trust law enforcement, such as pre-investigation, commitment system, leniency system, and fine discretion. Specific cases where incentives are not applicable are also clarified. The incentives are mainly in the form of non-punishment at administrative discretion or lenient or mitigated administrative penalties.

III. Conclusion

The 2024 Guidelines provide scenario-based guidance on various aspects of enterprise compliance management, including organizational structure and responsibilities, risk identification and assessment, compliance training, compliance incentives and penalties, and information technology construction. This further enhances the instructiveness and operability of anti-trust compliance, offers practical guidance for business operators to improve their anti-trust compliance governance, and also helps to promote business operators’ awareness and capabilities of anti-trust compliance management.

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