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March 19, 2019

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Companies given pass on minor breaches

Local startup companies which commit minor breaches of business operations can now escape penalties if they quickly correct their mistakes.

These include issues such as misstated advertisements and faulty firefighting equipment.

Yesterday, Shanghai issued the nation’s first provincial-level, cross-industry list of minor illegal acts which can be exempted from punishment.

The list of 34 types of minor illegal acts was co-released by the city’s bureau of justice, market watchdog and emergency management bureau.

It covers business administration, quality supervision, food security and fire control.

According to the local bureau of justice, the majority of companies that commit minor illegal acts are medium and small-sized enterprises or innovation-oriented enterprises.

Most of them are newly established.

If they are penalized heavily, it can affect their growth.

So instead of an administrative penalty, the companies will receive criticism and education as well as guidance from authorities.

For example, advertising law stipulates that ads posted on media should be marked as “ads,” and differentiated from other information.

Companies that fail to do so can be fined up to 100,000 yuan (US$14,893).

Prompt rectification

But under the provisions of the list, companies can escape punishment if they promptly amend the information with an “ad” mark.

Four of the 34 items are related to minor problems regarding food safety.

For example, if an employer hasn’t trained staff correctly or if staff clothing fails to meet standards. Only first-time offenses, with no food safety problems, and with a quick correction, can be exempted.

Listed items for fire safety relate to storing and trading flammable and explosive materials.

“We will collect feedback from the market entities and requirements in relevant fields for further study,” said Luo Peixin, deputy head of the Shanghai Bureau of Justice.

“We will categorize the methods and experiences to update the list to make for a better business environment.”


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