In order to guide enterprises to implement the main responsibility of anti-monopoly compliance in concentration of undertakings, improve the awareness and management level of anti-monopoly compliance of concentration of undertakings, and promote the healthy development of the socialist market economy, the State Administration for Market Regulation issued the Guidelines for Anti-monopoly Compliance of Concentration of Undertakings (hereinafter referred to as the Guidelines). Here's an explanation of the relevant content:
1. The necessity and legal basis for formulating the Guidelines
The Anti-Monopoly Law of the People's Republic of China, amended in 2022, proposes to guide enterprises to operate in compliance. In recent years, with the deepening of the supervision of concentration of undertakings, enterprises' awareness of legal declaration has been significantly enhanced, and some enterprises, especially small and medium-sized enterprises, still have deficiencies in compliance awareness and capacity building, and the need to strengthen compliance guidance is relatively strong. In order to implement the decision-making and deployment of the Party Central Committee and the State Council on normalized supervision and serve enterprises to do a good job in compliance construction, the State Administration for Market Regulation has studied and formulated the Guidelines in accordance with the Anti-Monopoly Law of the People's Republic of China, the Provisions of the State Council on the Declaration Standards for Concentration of Undertakings, and the Provisions on the Review of Concentration of Undertakings.
2. The drafting process of the Guidelines
In August 2022, the State Administration for Market Regulation (SAMR) initiated the drafting of the Guidelines, during which it carried out in-depth investigation and research, summarized and learned from experience, and solicited extensive opinions.
(1) In-depth investigation of the current status and needs of enterprise compliance. Actively carry out research on the normalization of supervision and investigation of business operator concentration, understand the compliance construction and demands of key enterprises, and hold many special discussions with enterprises, universities, scientific research institutions, law firms, etc., to listen to opinions and suggestions.
(2) Carefully study compliance risks and management systems. Comprehensively sort out and summarize the most common compliance problems of enterprises in the process of supervision of concentration of undertakings, and analyze and study the shortcomings of compliance management. On this basis, we will fully draw on compliance documents such as the Anti-monopoly Compliance Guide for Business Operators to form a targeted compliance plan.
(165) Widely solicit opinions and suggestions from all parties. The opinions of relevant ministries and commissions, the expert advisory group of the Anti-monopoly Commission of the State Council, the provincial market supervision department and the public have been solicited, and the relevant opinions and suggestions have reached <>, and the State Administration for Market Regulation has carefully studied and adopted rationalization suggestions, and continuously improved the Guidelines.
3. Main features of the Guidelines
The Guidelines focus on compliance management in the area of concentration of undertakings, and mainly show the following characteristics:
(1) Highlight the purpose of service. The Guidelines aim to guide and assist enterprises in establishing a compliance management system for concentration of undertakings and promote their healthy development. In order to better serve enterprises, the Guidelines propose that the State Administration for Market Regulation and provincial market supervision departments should strengthen compliance publicity and training, and at the same time encourage associations to play a role as a bridge to strengthen compliance exchanges and training.
(2) Emphasize the basis of practical results. As a special guideline in the field of concentration of undertakings, the Guidelines do not oblige enterprises to establish a separate compliance system for concentration of undertakings, and enterprises can incorporate the compliance elements of concentration of undertakings according to their own anti-monopoly compliance construction to avoid additional compliance costs.
(3) Highlight enterprise-centered focus. The Guidelines use the idea of categorical and hierarchical management, fully consider the wide differences in the management models of different types of enterprises and the frequency of M&A activities of enterprises, encourage and recommend enterprises that have reached a certain scale and have more frequent M&A behavior, formulate compliance systems, and give enterprises full flexibility in system design.
(4) Highlight problem-oriented. In order to help enterprises better understand the legal risks that may be faced by various aspects of a concentration of undertakings, the Guidelines introduce for the first time case explanations, which are the most common problems in the declaration process based on past law enforcement experience, prompting enterprises to focus on and enhance the practicality of the guidelines.
4. Main contents of the Guidelines
The full text of the Guidelines consists of six chapters and 35 articles, mainly as follows:
Chapter I, "General Provisions", clarifies the purpose and basis of the Guidelines, the necessity of compliance and the scope of application of the Guidelines, and points out that the Guidelines are special guidelines detailing the Anti-Monopoly Compliance Guidelines for Business Operators.
Chapter II, "Main Provisions on Merger Review", briefly introduces the legal provisions of the merger review system, as well as the legal risks and possible legal liabilities for violation of the legal provisions.
Chapter III, "Key Compliance Risks", focuses on the issues that should be paid attention to in all aspects of the concentration of undertakings, mainly including whether and when to declare, "rushing" after filing, eliminating restrictions on competition, violating review decisions, obstructing review investigations, and overseas compliance risks.
Chapter 4, "Compliance Risk Management", mainly introduces how to formulate a compliance management system for concentration of undertakings in a targeted manner, in particular, it is recommended that enterprises embed compliance review of concentration of undertakings in the decision-making process of investment and M&A, and clarify the compliance management department, compliance responsible persons and personnel in key positions regarding compliance advice and risk response measures on concentration of undertakings.
Chapter 5, "Compliance Management Guarantees", mainly describes how to ensure the effective implementation of compliance management of concentration of undertakings, including compliance commitments, compliance reports, compliance evaluations, compliance consultation, compliance training, compliance rewards and punishments, compliance incentives and other safeguard measures.
Chapter 6, "Supplementary Provisions", clarifies that the Guidelines are not mandatory, and enterprises can establish a compliance work system based on their own characteristics.
5. Strengthen prior compliance and promote normalized supervision
In the next step, the State Administration for Market Regulation will be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, adhere to the equal emphasis on standardized supervision and development, strengthen legal supervision, credit supervision, and smart supervision, and promote the prior compliance efficiency of normalized supervision of concentration of undertakings:
First, do a good job in publicity and training on compliance with concentration of undertakings, and actively carry out compliance publicity and training in conjunction with provincial market supervision departments, business associations, law firms and other parties, so as to create a good atmosphere for competition and compliance in the whole society.
The second is to study the compliance evaluation system for concentration of undertakings, guide provincial market supervision departments to regularly understand the compliance management of enterprises, give necessary support to enterprises in a timely manner, select and promote typical compliance cases, and encourage enterprises to operate in compliance.
The third is to improve the early warning mechanism for the risk of concentration of undertakings, guide the provincial-level market supervision department to rely on the enterprise registration system to establish and improve the risk reminder mechanism for the declaration of concentration of undertakings, and rely on the first step to serve enterprises to declare according to law.
The fourth is to implement a regular communication mechanism, hold symposiums with enterprises and law firms from time to time, listen to opinions and suggestions on optimizing and improving the review of concentration of undertakings, understand the needs of enterprises, and provide high-quality supervision guidance for enterprises investing in mergers and acquisitions.