Local governments in China will have to explain any fines on companies if their total rises by more than 20 per cent year on year.
The order from Beijing is part of central government efforts to stamp out illegal investigations and profit-seeking targeting private enterprises.
It is also part of the government’s latest economic recovery efforts that kicked off in March.
The order targets four major issues: arbitrary fines and inspections; unlawful enforcement and profit-driven behaviour; inconsistent enforcement standards that burden enterprises; and abuse of power.
“These problems are widespread and extremely harmful, and they are the ones that enterprises complain about the most,” said Hu Weilie, China’s vice-minister of justice, on Thursday. “The success of this special campaign hinges on whether these issues can be truly corrected.”
The Justice Ministry’s initiative involves real-time nationwide statistical analysis of enforcement activity, with emphasis on detecting unusual increases in punitive fees.
