The positive attitude of Chinese Courts towards AML enforcement

Such opinion is considered novel to the professional circle studying the AML. Due to the characteristic of the Law, the administrative departments, other than courts, are the leading force in its enforcement. There is now a bulk of uncertainty regarding the AML administrative procedure. The administrative departments therefore take necessary cautions in their announcements and practices. In such atmosphere, the Chinese courts obviously come to the fore.

In accordance to precedent, when dealing with certain civil litigation suits which also concern administrative procedure, Chinese courts prefer to accept civil litigation after the administrative departments have issued their relevant decisions. For instance, regarding a recent misrepresentation damage case in the stock market, after the Chinese Securities Regulatory Commission (CSRC) promulgated its punishment decision about misrepresentation behaviour, the courts then permitted plaintiffs to file civil cases pursuing compensation. The Chinese Supreme Court has now announced that the administrative decision is not a precondition to civil litigation. This is somewhat unexpected and there will likely be conflicts in such arrangements to some extent. If a civil process and an administrative process proceed at the same time, we must question how to avoid conflicts between their results. The enforcement of the AML consumes tremendous time, fiscal and human resources of both administrative and judicial forces. Taking consideration of the Chinese economy, how to avoid wasting limited resources in parallel processes should be a severe conundrum to the system designer. Such issues are more complicated than the simplicity of the announcement of permission to AML litigation.

In fact, judicial explanation should not be tangible in the near future. Usually Chinese Supreme Court-promulgated judicial explanations relate to a specific law and arrive quite late after the enactment of such law. For the AML, courts lack experience and typical cases: it is fundamentally difficult for the Chinese Supreme Court to draft a practical explanation.

Compared with their administrative counterparts, familiarity with AML is more urgent for Chinese judges. Inasmuch as there are no detailed guidelines and specific regulations, administrative organs could delay their action temporarily. However, for courts, there is no excuse and courts should provide remedy for damage even without the specific provisions.

As far as practice is concerned, courts also face the immediacy of AML enforcement. For example, in Chongqing, plaintiffs sued insurance companies in the local court. Organised by an insurance guild, some insurance companies agreed to set a bottom line for car insurance premiums, amid fierce competition. Consumers perceived the agreements as price fixing. In Beijing, a litigator sued ChinaNet, the main telecommunication provider in China, arguing the defendant had treated clients differently. Clients with Beijing ID cards enjoyed priority in telephone service, and clients without local ID cards argued that such deeds violated the AML with regard to the discriminative treatment stipulation. The acceptance of Anti-monopoly litigation in Chinese courts has spurred curiosity, though the details of the proceedings have not been disclosed.

At first, many within the Chinese professional circle expected a breakthrough in AML enforcement by administrative institutions. But such optimism could not be upheld for long. After three months, the actual actions of administrative organs have been seldom heard. Surprisingly, the courts appear determined to enforce the AML quickly.

If the statement by the Chinese Supreme Court is not just theory, the first real AML attempt would be trigged by anti-monopoly litigation, and will bring many surprises to AML enforcement.