Tentative Measures for Investigating and Handling Concentrations of Business Operators that Fail to Report in Accordance with the Law

(Issued by the Ministry of Commerce on December 30 2011 and effective as of February 1 2012.).



Order of Mofcom [2011] No.6





Article  1:These Measures have been formulated pursuant to relevant provisions of the PRC Anti-monopoly Law (the Anti-monopoly Law) and the State Council, Provisions on the Reporting Threshold for Concentrations of Business Operators (the Provisions) in order to regulate the investigation and handling of concentrations of business operators that reach the reporting threshold but fail to report the same in accordance with the law.








Article 2: For the purposes of these Measures, the phrase “a concentration of business operators that fails to report in accordance with the law” means that a concentration of business operators reaches the reporting threshold specified in the Provisions but the business operators fail to report this to the Ministry of Commerce in advance in accordance with the Anti-monopoly Law, and carry out the concentration in question nevertheless.






The Measures for Calculation of Business Turnover for the Reporting of Concentrations of Business Operators in the Financial Sector shall govern the calculation of the business turnover of banking financial institutions, securities companies, futures companies, fund management companies and insurance companies.





Article 3: The Ministry of Commerce shall be responsible for the investigation and handling of concentrations of business operators that fail to report in accordance with the law.





The Ministry of Commerce may, for the purposes of its work, appoint the competent provincial-level commerce department to assist in investigating a concentration of business operators that fails to report in accordance with the law in its jurisdiction.





Article 4: Any entity or individual has the right to report to the Ministry of Commerce a concentration of business operators that is suspected of failing to report in accordance with the law. The Ministry of Commerce shall keep the confidentiality of whistleblowers.





If such reports are made in writing and provide the basic particulars of the whistleblower and the parties being reported, the facts and evidence relating to the concentration of business operators that is suspected of failing to report in accordance with the law, etc, the Ministry of Commerce shall carry out the necessary verification thereof.


With respect to facts and evidence relating to a concentration of business operators that is suspected of failing to report in accordance with the law obtained by other means, the Ministry of Commerce may carry out the necessary verification thereof.





Article 5: With respect to a concentration of business operators for which preliminary facts and evidence indicate that there is a suspicion of a failure to report in accordance with the law, the Ministry of Commerce shall open a case and notify the business operators to be investigated in writing.





For the purposes of these Measures, the term “a business operator to be investigated” means a party with a reporting obligation as specified in Article 9 of the Measures for the Reporting of Concentrations of Business Operators.





Article 6: The business operators to be investigated shall, within 30 days from the date of service of the case opening notice, submit to the Ministry of Commerce documents and information relating to whether the transaction being investigated constitutes a concentration of business operators, whether it reaches the reporting threshold, whether it has been carried out without reporting, etc.





Article 7: The Ministry of Commerce shall complete its preliminary investigation as to whether the transaction being investigated falls within the category of a concentration of business operators that fails to report in accordance with the law within 60 days from the date of receipt of the documents and information submitted in accordance with Article 6 hereof by the business operators being investigated.





If the transaction does fall within the category of a concentration of business operators that fails to report in accordance with the law, the Ministry of Commerce shall conduct a further investigation and notify the business operators being investigated thereof in writing. The business operators shall suspend the carrying out of the concentration of business operators.





If the transaction does not fall within the category of a concentration of business operators that fails to report in accordance with the law, the Ministry of Commerce shall render a decision not to conduct a further investigation and notify the business operators being investigated thereof in writing.





Article 8: If the Ministry of Commerce decides to conduct a further investigation, the business operators being investigated shall submit relevant documents and information to the Ministry of Commerce in accordance with the Measures for the Reporting of Concentrations of Business Operators within 30 days from the date of receipt of the written notice from the Ministry of Commerce.





The Ministry of Commerce shall complete the further investigation within 180 days from the date of receipt of the documents and information complying with the preceding paragraph submitted by the business operators being investigated.





During the further investigation stage, the Ministry of Commerce shall assess in accordance with relevant provisions of the Anti-monopoly Law and the Measures for the Review for Concentrations of Business Operators, etc. whether the transaction being investigated has or could have the effect of eliminating or restricting competition.





Article 9: When conducting an investigation, the Ministry of Commerce may adopt the measures specified in Article 39 of the Anti-monopoly Law.





Article 10: When the Ministry of Commerce investigates a concentration of business operators that fails to report in accordance with the law, there may not be less than two investigators and they shall present their lawful credentials.





When conducting questioning and the investigation, the investigators shall keep notes thereon, and the same shall be signed by the person being questioned or investigated.





Article 11: During an investigation, the business operators being investigated and materially interested parties shall have the right to express their opinions. The Ministry of Commerce shall verify the facts, reasons and evidence presented by the business operators being investigated and materially interested parties.





Article 12: The business operators being investigated, materially interested parties and other relevant entities or persons shall cooperate with the Ministry of Commerce in performing its duties in accordance with the law, and may not refuse or obstruct the Ministry of Commerce's investigation.





Article 13: If, following the investigation, it is determined that the business operators being investigated carried out the concentration of business operators without reporting the same in accordance with the law, the Ministry of Commerce may fine them up to Rmb500,000 and order them to take the following measures to restore the state existing before the concentration of business operators:





(1) halt the carrying out of the concentration of business operators;





(2) dispose of the shares or assets within a specified period of time;





(3) transfer the business within a specified period of time; and/or





(4) take other necessary measures.





When handling the matter in accordance with the preceding paragraph, the Ministry of Commerce shall take into consideration factors such as the nature, extent and duration of the failure to report, the outcome of the assessment of the effect on competition derived in accordance with the third paragraph of Article 8 hereof, etc.





Article 14: Before rendering its handling decision pursuant to Article 13 hereof, the Ministry of Commerce shall inform the business operators being investigated of the investigation conclusions and the facts and evidence on the basis of which the conclusions were reached.





The business operators being investigated shall submit their written opinions by the deadline set by the Ministry of Commerce. The written opinions shall include relevant facts and evidence.


Article 15: The Ministry of Commerce shall notify the business operators being investigated in writing of the handling decision rendered by it in accordance with Article 13 hereof. Handling decisions made in respect of concentrations of business operators that fail to report in accordance with the law may be made public.





Article 16: When it conducts an investigation in accordance with the law, the Ministry of Commerce may impose, in accordance with Article 52 of the Anti-monopoly Law, penalties for refusals to provide relevant materials and information, provision of false information, concealment, destruction or diversion of evidence, or other acts of refusing or obstructing an investigation.





Article 17: Service of written documents that need to be served on business operators being investigated shall be effected with reference to relevant provisions of the PRC Civil Procedure Law (2nd Revision) .





If the Ministry of Commerce effects service by way of an announcement, it shall post the document that needs to be served on its official website.





Article 18: If business operators are dissatisfied with the decision rendered by the Ministry of Commerce in accordance herewith, they may, in the first instance, apply for administrative review in accordance with the law; if they are dissatisfied with the administrative review decision, they may institute an administrative action in accordance with the law.





Article 19: The Ministry of Commerce, business operators being investigated and other entities and individuals shall keep confidential trade secrets and other information that needs to be kept confidential to which they were privy in the course of an investigation, unless the same is required to be disclosed in accordance with laws and regulations, or the prior consent of the holder of the rights in the trade secrets is secured.





Article 20: If a member of the working personnel of the Ministry of Commerce abuses his/her authority, is derelict in his/her duties, practises favouritism by committing fraud or divulges trade secrets learnt in the course of law enforcement, and the same constitutes a criminal offence, he/she shall be criminally prosecuted in accordance with the law; if a criminal offence is not constituted, he/she shall be sanctioned in accordance with the law.





Article 21: These Measures shall be effective as of February 1 2012.

clp reference:5000/11.12.30prc reference:商务部令 [2011] 第6号promulgated:2011-12-30effective:2012-02-01