went into effect on August 1, 2008. But
until the end of 2012, this law seemed
dormant. No single defendant had been
convicted of violating Anti-Monopoly
Law. In fact, the only monetary penalty
levied by any Anti-Monopoly Law
enforcement agencies was made against
two small trading companies for their
monopolizing a raw material. They were
fined a total sum of RMB7 million in
November 2011.
Starting from early 2013, the
enforcement of the AML tightened
sharply. Well-known cases include:
suppliers, including the two South
Korean companies (Samsung and
LG), and four Taiwan companies,
were fined a total sum of RMB353
million for their horizontal monopoly
agreement;
were fined a total sum of RMB449
million for their respective vertical
monopoly agreements;
Gold Jewelry and five Shanghai local
retailers were fined a total sum of
RMB1.05 million for their horizontal
monopoly agreement;
powder suppliers were fined a total
sum of RMB668 million for their
respective vertical monopolistic
conducts.
2014, Anti-Monopoly Law enforcement
agencies have been even busier. Big
brands such as Microsoft, Qualcomm,
Tetra Pak, Sumitomo, Seiko, Mercedes,
BMW and AUDI were investigated and/
or fined for their monopolistic activities.
Sumitomo and seven other auto parts
manufacturers were fined a total of
RMB830 million and Seiko and three
other bearing manufacturers were fined a
total of RMB400 million.
for their monopolistic conducts; some
small and medium-sized companies
were targeted by AM law enforcement.
For example, in July 2014, the State
Administration of Industry & Commerce
announced that they had closed 12
cases, all involving small and medium-
sized companies.
Although more domestic companies
have been investigated for monopolistic
activities, most of the penalties were
imposed on FIEs. This phenomenon
has led to several foreign governments
expressing their concerns to the Chinese
government.
In my presentation titled "China's
Anti-Monopoly Law and its Impact on
Distribution of Goods in China," which I
presented at the Association of Corporate
Counsel 2013 Annual Conference, I
urged corporate counsel to pay more
attention to compliance with China's
AML to ensure smooth, hassle-free
business activities. Now, on high alert,
due to Anti-Monopoly enforcement
pressure, some FIEs have already started
to review their sales policies and legal
documents, and to train their sales staff
on how to be compliant with China's
AML.
corruption was nearly out of control, in
both political and commercial activities.
Many foreign businessmen had adapted
themselves to this corrupt business
environment and had even found it more
lucrative for doing business than in less
corrupt countries.
President Xi, and his colleague Mr.
Wang Qishan, secretary of the Chinese
Communist Party Commission for
Discipline Inspection, has significantly
improved the corruption situation. From
November 2012 to the end of 2014, 58
ministry level high officials (and retired
high officials) have been investigated
and/or arrested for corruption. Numerous
lower level officials have been sent
to jail. Dozens of officials have been
frightened into committing suicide. An
anti-corruption storm is sweeping over
China!
in the political realm than in the
commercial. But I believe that this
imbalance should not be interpreted
to mean that China would continue as
before to tolerate commercial corruption.
In my opinion, this imbalance is just
expediency of implementing the anti-
corruption storm. President Xi and
Wang Qishan know well that they
need to tackle political corruption first
before tackling commercial corruption.
This is the reason why most bribers
were freed after confessing to bribery
activities. Bribers' testimony is needed
for prosecuting corrupt officials. Once
President Xi and Mr. Wang find that
government officials are clean enough,
the anti-corruption storm will surely blow
stronger through the commercial sector.
Several signs already show President
Xi and Wang Qishan's hatred towards
commercial corruption. For example, a
large number of high officials of state-
owned companies, including CNPC,
China Resources, China Unicom, China
Shenhua's high officials, have been sent
to prison. Another example occurred
in September 2014 when a record-high
fine of RMB3 billion was imposed on the
GSKCI for its corruption and GSKCI's
chairman Mark Reilly was sentenced to
three years imprisonment!
I see no coincidence that the above
three new policies/measures have all
occurred since President Xi took office.
Xi's concept of governance is clear to
the public now. In the political field, he
expects a clean, transparent and efficient
government. Regarding commerce,
he seeks to build a fair, transparent,
hassle-free market. Such outcomes
would, of course, be beneficial for foreign
investors in general. But for those who
are used to doing business in China's
pre-Xi business environment, I suggest
that they ought to take measures soon to
prepare for the impending storm that is
potentially coming their way.