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Market authorities in Shanghai and the eastern provinces of Jiangsu, Zhejiang, and Anhui have collaborated to clarify regulations related to lighter penalties and exemptions, demonstrating the Yangtze River Delta’s dedication to cultivating a more inclusive and lawful business environment.
For the first time in the national market oversight framework, these regulations, set to take effect on February 1, explicitly differentiate the primary factors that determine “lighter” versus “reduced” penalties. The regulation scope has also grown from 19 to 26 provisions.
In an effort to foster high-quality integration within the Yangtze River Delta, the regional regulators introduced a unified version of exemption and leniency policies in 2023, establishing consistent standards across the area.
Since then, the region has processed 18,200 cases of minor violations that were exempt from penalties, resulting in over CNY 500 million (approximately USD 71.6 million) in waived fines. In Zhejiang province alone, more than 25,000 cases were either exempted or assigned lighter penalties, totaling over CNY 1.7 billion (around USD 240 million).
The updated regulations introduce four major revisions compared to earlier versions. They highlight for the first time the key factors influencing lighter or reduced penalties, emphasize a balanced approach that combines inclusiveness with caution, and refine the scenarios under which lighter penalties are applicable as well as the criteria for waivers.
Furthermore, the new rules prioritize a mix of penalties with educational efforts. They favor softer measures such as persuasion, guidance, and discussions to promote legal compliance among businesses. At the same time, they support innovation, especially in emerging industries and new business models like artificial intelligence, adopting an inclusive and cautious stance that allows room for growth. In cases involving intentional misconduct or gross negligence that causes harm, leniency and waivers are to be applied with prudence.
The regulations also clarify circumstances such as actively mitigating the impact of illegal actions, voluntarily confessing to unknown unlawful activities, cooperating fully during investigations, voluntarily submitting evidence, having secondary involvement in collective violations, or facing genuine hardship due to disability or severe illness. These updates aim to make the rules more practical and enforceable.
The next phase involves the full implementation of these new regulations across the four provincial regions, with officials from Zhejiang’s Market Supervision Administration emphasizing the importance of publishing typical cases to promote a balanced approach in administrative enforcement, ensuring penalties remain proportionate to the violations.
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