Regulation on Disciplinary Actions Against the Managerial Professionals of State-owned Enterprises

Regulation on Disciplinary Actions Against the Managerial Professionals of State-owned Enterprises

Order of the State Council of the People's Republic of China
(No. 781)

The Regulation on Disciplinary Actions Against the Managerial Professionals of State-owned Enterprises, as adopted at the 31st executive meeting of the State Council on April 26, 2024, is hereby issued and shall come into force on September 1, 2024.

Li Qiang, Premier
May 21, 2024

Regulation on Disciplinary Actions Against the Managerial Professionals of State-owned Enterprises

Chapter I General Provisions
Article 1 This Regulation is formulated in accordance with the Law of the People's Republic of China on Administrative Discipline for Public Officials ("Law on Administrative Discipline for Public Officials") and other laws for the purposes of regulating disciplinary actions against the managerial professionals of state-owned enterprises and strengthening supervision over such professionals.
Article 2 For the purposes of this Regulation, "managerial professional of a state-owned enterprise" means the following public officials in state-funded enterprises:
(1) A person who performs organizational, leadership, management, supervisory, and other duties in a wholly or one-shareholder state-owned company or enterprise.
(2) A person who performs organizational, leadership, management, supervisory, and other duties in a state-controlled or state minority-owned company, or any of its branches, after being nominated, recommended, appointed, or approved, among others, by a Party organization, state authority, wholly or one-shareholder state-owned company or enterprise, or a public institution.
(3) A person who, with the approval or decision of the organization responsible for the management and supervision of state-owned assets in a state-funded enterprise, represents it in organizational, leadership, management, supervisory, and other work in a state-controlled or state minority-owned company or any of its branches.
If an appointment and removal authority for the managerial professionals of state-owned enterprises ("appointment and removal authority") takes disciplinary action against a managerial professional of a state-owned enterprise who violates the law, the provisions of Chapters II and III of the Law on Administrative Discipline for Public Officials and this Regulation apply.
Article 3 Disciplinary actions against the managerial professionals of state-owned enterprises shall adhere to the leadership of the Communist Party of China, adhere to the principle of the Party managing officials, build a strong contingent of managerial professionals of state-owned enterprises, and promote the high-quality development of state-owned enterprises.
Article 4 An appointment and removal authority shall strengthen the education, management, and supervision of the managerial professionals of state-owned enterprises. When taking disciplinary action against a managerial professional of a state-owned enterprise, the appointment and removal authority shall adhere to fairness and impartiality, and make decisions through collective discussion; adhere to tempering severity with leniency and combining punishment with education; and under the principles of the rule of law, based on facts and the law, protect the lawful rights and interests of the managerial professionals and related personnel of state-owned enterprises.
Article 5 An institution performing the duties of capital contributor or an authority with the power of official management shall, in accordance with laws, regulations, and relevant provisions issued by the state, guide state-owned enterprises in integrating and optimizing supervisory resources, promote the connection between supervision by capital contributors on one side and disciplinary inspection and supervision, inspection supervision, audit supervision, financial supervision, and social supervision on the other, improve coordinated and efficient supervisory mechanisms, establish an internal supervision and management system with cooperation and mutual control, and enhance the systematic, targeted, and effective supervision of state-owned enterprises and their managerial professionals.
Article 6 A disciplinary action taken against a managerial professional of a state-owned enterprise shall be based on clear facts, conclusive evidence, accurate characterization, appropriate handling, legal procedures, and complete formalities, and fit the nature, circumstances, and degree of harm of his or her illegal act.
Chapter II Types and Application of Disciplinary Actions
Article 7 The types of disciplinary actions are:
(1) Warning.
(2) Demerits.
(3) Serious demerits.
(4) Demotion.
(5) Removal from office.
(6) Expulsion.
Article 8 The period of disciplinary action is:
(1) In the case of a warning, 6 months.
(2) In the case of a demerit, 12 months.
(3) In the case of a serious demerit, 18 months.
(4) In the case of demotion or removal from office, 24 months.
A disciplinary decision takes effect on the decision-making date, on which the period of disciplinary action starts.
Article 9 Where a managerial professional of a state-owned enterprise is liable for disciplinary actions for not less than two illegal acts, the disciplinary actions shall be determined separately. If the types of disciplinary actions to be taken are different, the heavier or heaviest shall be taken; or if the disciplinary actions to be taken are the same and lighter than removal from office, the period of disciplinary action may be determined not to be less than the period of a single disciplinary action nor more than the sum of the periods of the disciplinary actions, to the extent of 48 months.
Article 10 Where a state-owned enterprise commits an illegal act, or its managerial professionals collectively make an illegal decision, resulting in legal liability, the liable leader and directly liable managerial professionals shall be subjected to disciplinary action.
If not less than two managerial professionals of a state-owned enterprise are liable for disciplinary action for a joint illegal act, each shall be subjected to a disciplinary action according to his or her share of liability.
Article 11 Under any of the following circumstances, a managerial professional of a state-owned enterprise may be subjected to a disciplinary action below the statutory range or a mitigated disciplinary action:
(1) Voluntarily confessing to any illegal act for which he or she is liable for disciplinary action.
(2) Cooperating in the investigation and truthfully stating the facts of his or her illegal act.
(3) Reporting the illegal act of another person, which is verified.
(4) Voluntarily taking measures to effectively avoid or recover losses or eliminate adverse effects.
(5) Playing a minor or auxiliary role in a joint illegal act.
(6) Voluntarily surrendering or making restitution of illegal income.
(7) Making an error in promoting the reform of a state-owned enterprise due to a lack of experience in a pilot program.
(8) Other circumstances as provided by laws and regulations that warrant a mitigated disciplinary action or disciplinary action below the statutory range.
"Mitigated disciplinary action" means a lighter disciplinary action taken within the range of disciplinary actions for an illegal act as specified in this Regulation.
"Disciplinary action below the statutory range" means a disciplinary action taken within the range immediately below the range of disciplinary action for an illegal act as specified in this Regulation.
Article 12 Where a managerial professional of a state-owned enterprise commits an illegal act under minor circumstances and under any of the circumstances specified in paragraph 1 of Article 11 of this Regulation, he or she may be interviewed and reminded, criticized and educated, ordered to conduct a self-examination, given an admonition, or exempted from or refuse to be subjected to disciplinary action.
If a managerial professional of a state-owned enterprise is coerced into participating, or forced to participate, in illegal activities due to ignorance of the truth, and repents after receiving criticism and education, he or she may be given a mitigated disciplinary action, or be exempted or refuse to be given disciplinary action.
Article 13 Under any of the following circumstances, a managerial professional of a state-owned enterprise shall be given an aggravated disciplinary action:
(1) Being liable for disciplinary action for another intentional illegal action committed during the period of disciplinary action.
(2) Preventing another person from filing a report or providing evidence.
(3) Making a false confession in collusion or fabricating, concealing, or destroying evidence.
(4) Harboring a person involved in the same case.
(5) Coercing another person into committing or instigating him or her to commit an illegal act.
(6) Refusing to surrender or make restitution of illegal income.
(7) Other aggravating circumstances specified by laws and regulations.
"Aggravated disciplinary action" means a heavier disciplinary action within the range of disciplinary action for an illegal act specified in this Regulation.
Article 14 A managerial professional of a state-owned enterprise shall not be promoted in position or post level, or professional title, within the period of disciplinary action; and if he or she is subjected to a demerit, serious demerit, demotion, or removal from office, he or she shall not be given a pay and benefits grade increase. In the case of removal from office or a demotion in position or post level, pay and benefits shall be reduced concurrently. In the case of expulsion, the employer will rescind the labor contract in accordance with the law.
Article 15 Property illegally acquired by a managerial professional of a state-owned enterprise or his or her property used for an illegal act shall be returned to the original owner or holder, except where such property is subject to confiscation, recovery, or an order for restitution by a relevant authority in accordance with the law.
If a managerial professional of a state-owned enterprise receives a position, position level, grade, post or employee level, professional title, benefits, eligibility, educational attainment, academic degree, honor, award, or any other advantage resulting from an illegal act, the appointment authority shall take corrective action or propose that the relevant authority, entity, or organization should take corrective action according to applicable provisions.
Article 16 Where a retired managerial professional of a state-owned enterprise is liable for disciplinary action for an illegal act before or after retirement, no disciplinary decision will be made, but a case may be opened against him or her for investigation; if he or she is liable for a demotion, removal from office, or expulsion according to the law, his or her benefits shall be adjusted according to applicable provisions, and property illegally acquired by him or her and his or her property used for an illegal act shall be disposed of in accordance with Article 15 of this Regulation.
Chapter III Illegal Acts and Applicable Disciplinary Actions
Article 17 If a managerial professional of a state-owned enterprise commits any of the following acts, he or she will be subjected, in accordance with Article 28 of the Law on Administrative Discipline for Public Officials, to a demerit or a serious demerit; or demotion or removal from office, if the circumstances are relatively serious; or expulsion, if the circumstances are serious:
(1) Airing views that undermine upholding and improving the socialist basic economic system.
(2) Refusing directly or in disguise to implement decisions and arrangements regarding the reform and development of state-owned enterprises and Party building.
(3) Damaging national security and interests in foreign economic cooperation, foreign aid, foreign exchange, or other work.
The publication of an article, speech, declaration, or statement, among others, in opposition to the national guiding ideology established by the Constitution, the leadership of the Communist Party of China, the socialist system, or reform and opening up is punishable by expulsion.
Article 18 If a managerial professional of a state-owned enterprise commits any of the following acts, he or she will be subjected, in accordance with Article 30 of the Law on Administrative Discipline for Public Officials, to a warning, demerit, or serious demerit; or demotion or removal from office, if the circumstances are serious:
(1) Deciding on a major matter subject to decision of the state-owned enterprise, an important appointment or removal, a major project arrangement, or a large investment in violation of the prescribed decision-making procedures and purview.
(2) Intentionally circumventing, interfering with, or undermining collective decision-making, whereby an individual or a minority of individuals decide on a major matter subject to decision of the state-owned enterprise, an important appointment or removal, a major project arrangement, or a large investment.
(3) Refusing to implement or arbitrarily changing a major decision made collectively in accordance with the law by the Party committee (leading Party members' group), shareholders' meeting, board of directors, or employee representatives' meeting, among others, of the state-owned enterprise.
(4) Refusing directly or in disguise to implement or delaying the implementation of a decision made in accordance with the law by an institution performing the duties of capital contributor, an industry authority, or any other relevant authority.
Article 19 If a managerial professional of a state-owned enterprise commits any of the following acts, he or she will be subjected, in accordance with Article 33 of the Law on Administrative Discipline for Public Officials, to a warning, demerit, or serious demerit; or demotion or removal from office, if the circumstances are relatively serious; or expulsion......