Measures of the National Financial Regulatory Administration for the Exercise of Discretion over Administrative Penalties

Measures of the National Financial Regulatory Administration for the Exercise of Discretion over Administrative Penalties

(Issued by Order No. 5 [2024] of the National Financial Regulatory Administration on March 27, 2024, coming into force on May 1, 2024)

Chapter I General Provisions

Article 1 These Measures are developed in accordance with the Administrative Penalty Law of the People's Republic of China, the Banking Supervision Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, the Insurance Law of the People's Republic of China, and other relevant laws for the purposes of regulating the exercise of discretion over administrative penalties by the National Financial Regulatory Administration (“NFRA”) and its local offices, maintaining the market order of banking and insurance industries, and protecting the lawful rights and interests of the opposite parties in administration.

Article 2 For the purposes of these Measures, “discretion over administrative penalties” means the authority of the NFRA and its local offices to decide whether to impose an administrative penalty and the type and extent of the administrative penalty by comprehensively considering the facts, nature, circumstances, harmful consequences of an illegal act, subjective fault, and other factors in accordance with laws, administrative regulations, and banking and insurance regulatory provisions.

Where a banking or insurance institution, any other entity or individual (“the party”) violates any law, administrative regulation, or banking and insurance regulatory provision, and the NFRA or its local office imposes an administrative penalty in accordance with the law, it shall exercise the discretion over administrative penalties in accordance with these Measures, except as otherwise prescribed by law, administrative regulation, or the NFRA.

Article 3 Whether to impose an administrative penalty and the type and extent of discretion over administrative penalties shall be proportional to the facts, nature, circumstances, harmful consequences, and the degree of subjective fault of an illegal act.

Article 4 The discretion over administrative penalties shall be exercised in strict compliance with statutory procedures, and if an administrative penalty is to be imposed against a complicated or major illegal act, the decision shall be made by the person in charge of the NFRA or its local office upon collective discussion. No entity or individual may make or modify any administrative penalty decision without undergoing statutory procedures.

Article 5 The laws, administrative regulations, and banking and insurance regulatory provisions applicable at the time when the illegal act occurs shall apply to the imposition of administrative penalties. However, when an administrative penalty decision is made, if any law, administrative regulation, or relevant regulatory provisions have been amended or repealed, and a lighter penalty shall be given or an act is not deemed illegal in accordance with the new provisions, the new provisions shall apply.

Article 6 Where two or more parties jointly commit an illegal act, the primary and secondary roles that they play in the joint illegal act shall be distinguished, and corresponding administrative penalties shall be imposed separately.

Article 7 Where it is prescribed in any law, administrative regulation, or banking and insurance regulatory provision that an administrative penalty shall be imposed only if no corrective action is made within a prescribed time limit, the party shall be firstly ordered to take corrective action within a prescribed time limit; and if no corrective action is made within the prescribed time limit, an administrative penalty shall be imposed in accordance with the law. A reasonable time limit for taking corrective action shall be specified.

Article 8 Where the illegal act committed by a party is suspected of constituting a crime, the party shall be transferred to the judicial organ or disciplinary inspection and supervision organ in a timely manner in accordance with the relevant provisions and be held criminally liable in accordance with the law, and a criminal punishment shall not be exempted due to the imposition of an administrative penalty. If an illegal act constitutes a crime, for which a fine has been imposed by a people's court but the administrative organ has not imposed a fine on the party, the party shall not be fined once again.

Article 9 No administrative penalty may be imposed if an illegal act is not discovered within two years after it is committed. If financial security is involved and harmful consequences are caused, the aforesaid time limit shall be extended to five years, except as otherwise prescribed by any law.

The time limit specified in the preceding paragraph shall be calculated from the date when the illegal act is committed; and if the illegal act is of a continuous or continual nature, it shall be calculated from the date when the act terminates.

“The continuous status of an illegal act” means the circumstance where several independent illegal acts are committed continuously in violation of the same regulatory provisions based on the same intention of committing illegal acts.

“The continuance of an illegal act” means the continuance of an illegal act after it is committed.

Chapter II Levels and Applicable Circumstances of Discretion

Article 10 “Imposing a mitigated penalty in accordance with the law” means imposing a penalty below the types and range of penalty prescribed by laws, administrative regulations, and rules, except that a warning, circulation of a notice of criticism, and confiscation of illegal income shall apply.

If the maximum amount, instead of the minimum amount, of a fine is specified, the reduced fine shall not apply.

Article 11 “Imposing a lighter penalty in accordance with the law” means the application of a lighter penalty within the types and range of penalties prescribed by laws, administrative regulations, and rules, except that a warning, circulation of a notice of criticism, and confiscation of illegal income shall apply.

Article 12 “Imposing a heavier penalty in accordance with the law” means the application of a heavier penalty within the types and range of penalties prescribed by laws, administrative regulations, and rules, except that a warning, circulation of a notice of criticism, and confiscation of illegal income shall apply.

Article 13 Under any of the following circumstances, no penalty shall be imposed in accordance with the law:

(1) The illegal act is minor and corrected in a timely manner withou......