Typical cases of companies that were put on the List of Subjects with Seriously Illegal or Dishonest Acts under Market Regulation

1. Background

The Administrative Measures for the List of Subjects with Seriously Illegal or Dishonest Acts under Market Regulation (the "List") has become effective since 1 September 2021. As early as 2014 to 2015, the State Council of China has already mentioned the backlist of companies with severe illegal and dishonest acts in specific regulations.

This recent law has provided more explicit and comprehensive guidelines to strengthen social credit regulation and promote integrity.

The results of being included in the List may consist of fines, revoking administrative and business licenses, restrictions on business activities, or even shutdown of the company.

The List will keep companies with negative records for one year. The removal from the List is subject to fulfillment of specific conditions and approval of SAMR.

2. Selected cases

In March 2022, the SAMR published an article for typical cases about being included in the List. We have summarized some of them as the following:

• Among the ten cases, three are food safety related. For example, Jiangxi Likangle Biotechnology Co., Ltd (江西利康乐生物科技有限公司) was listed for illegal addition of sildenafil, tadalafil, and other drugs in the wines. See Knowaco Company Search Report (Instant & Riskplus) of this company.
• Beijing Hendida Trading Co., Ltd. (北京亨迪达商贸有限责任公司) was included in the List for conducting the business of assembly and modification of electric bicycles for profit, and the assembled products did not meet the national quality standards. See Knowaco Company Search Report (Instant & Riskplus) of this company.
• Guigang Tianxin LPG cylinder testing Co., Ltd. (贵港市天新液化石油气钢瓶检测有限公司) was punished due to forgery and fraudulent use of other companies' business name. See Knowaco Company Search Report (Instant & Riskplus) of this company.
• Yili Mengsheng Trading Co., Ltd. (伊犁萌晟商贸有限公司) issued 2,323 falsified testing reports with "pass" results for vehicle gas cylinders, and it also forged copies of 24 quality check reports. See Knowaco Company Search Report (Instant & Riskplus) of this company.
• The SAMR of Hubei Province put an individual on the List. The person sold batteries infringing on the exclusive right of using a trademark. See Knowaco Company Search Report (Instant & Riskplus) of this company.
• Since September 2021, Shandong Zhonggu Cement Co., Ltd. (山东中固水泥有限公司) has produced a total of 130 tons of unqualified cement, violating the product quality laws. Since 2019, this company has had four consecutive failures in quality inspection. See Knowaco Company Search Report (Instant & Riskplus) of this company. See Knowaco Company Search Report (Instant & Riskplus) of this company.

 Note: In the search report from Knowaco.com, sections 12 (administrative orders) and 14 (Serious law violations) may include the current records in the List. For historical records, please get in touch with [email protected] to run a customized search.