China’s banking and insurance penalties now get a standard upgrade

In December 2023, the China Banking and Insurance Regulatory Commission (CBIRC) released a draft of the Measures for the Implementation of Discretionary Powers in Imposing Administrative Penalties. The draft aims to standardize the discretionary powers of the CBIRC and its local counterparts in imposing administrative penalties in the banking and insurance industries. It includes provisions on factors to consider when determining penalties, the relationship between ordering corrections and administrative penalties, liability for jointly committing an offense, and the statute of limitations for penalties.

The draft also outlines specific circumstances under which no penalties, mitigated penalties, lighter penalties, and heavier penalties are applicable. It emphasizes the importance of prudential operation, consumer rights and interests, and learning from past experiences to prevent recidivism.

Lastly, the draft sets out the range of fines for different offenses in the banking and insurance industries. It also provides guidelines for deducting proceeds from an offense, taking into account refunds made by the party and relevant taxes and expenditures.

It is advised that relevant financial institutions pay close attention to the movements of the CBIRC and local regulatory authorities and adapt to the changes in the provisions as soon as possible.