Synopsis

China’s new Whistleblower Rewards Measures provides up to RMB1 million (approx. USD157,000) in rewards for the reporting of major violations of China’s various market conduct regulations. The regulations aim to provide greater incentives to whistleblowers and deter illegal activities in the market more effectively, particularly in light of the increased importance of whistleblowing across different industries in China in recent years. In light of these new measures, companies with operations in China should implement or strengthen their internal controls and reporting mechanisms.

Article

On December 1, 2021, the Interim Measures for Rewards for Whistleblower Reports of Major Violations in the Field of Market Regulation (Interim Measures) issued by the State Administration for Market Regulation (SAMR) and the Ministry of Finance (MOF) came into effect. The Interim Measures establish SAMR’s first set of comprehensive rules surrounding the reporting of “major violations” of China’s various market conduct regulations.

In short, the Interim Measures provide that a whistleblower will be awarded a monetary sum when all of the following conditions are satisfied:

• The report relates to a “major violation of laws” (defined as a suspected crime or an illegal act for which administrative punishments such as suspension/shutdown of production and business, revocation/cancellation of licenses, and relatively large amounts of administrative fines should be imposed, or illegal...

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