On December 30 2015 the State Administration for Industry and Commerce (SAIC) published its Interim Measures for the Administration of the List of Businesses Seriously Violating the Law and Becoming Discredited, which took effect on April 1 2016.

The interim measures list 10 circumstances in which a business can be deemed to have seriously violated the law. The following circumstances relate to trademark and unfair competition law:

  • where a business has incurred administrative penalties regarding unfair competition more than three times within two years;
  • where a business has incurred administrative penalties regarding trademark infringement more than twice within five years; and
  • where a trademark agency has been ordered to cease its activities.

The SAIC is in charge of supervising and orchestrating the management of the SAIC blacklist across China. Local administrations for industry and commerce (AICs) and market supervisory departments exercising AIC authority above county level will manage the blacklist within their jurisdictions.

Article 13 of the interim measures provides that blacklisted businesses will become a "target for supervision and administration". The legal representative or principal of a blacklisted business will be unable to serve in such capacity for three years and the business will be unable to receive a good-standing certificate or any other quality award.

In general, businesses that are blacklisted by the SAIC will be subject to:

  • their local AIC's credit constraints;
  • joint penalties from the AIC and other government authorities through the inter-departmental information sharing mechanism; and
  • public disclosure through the business credit disclosure system.

These disciplinary measures have been welcomed.

The interim measures also prescribe that a business will be removed from the blacklist when it has not committed a serious violation of the law for five years.

For further information on this topic please contact Huang Hui, Paul Ranjard, Huimin Qin or Nan Jiang at Wan Hui Da Law Firm & Intellectual Property Agency by telephone (+86 10 6892 1000) or email (huanghui@wanhuida.com, ranjard@wanhuida.com, qinhuimin@wanhuida.com or jiangnan@wanhuida.com). The Wan Hui Da Law Firm & Intellectual Property Agency website can be accessed at www.wanhuida.com.

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