Shanghai competition regulations boost compliance management

Effective from 1 January 2021, the Shanghai Anti-Unfair Competition Regulations require all business operators in Shanghai to strengthen their internal controls and compliance management. This is the first time that the concept of a compliance programme has been introduced into Chinese laws and regulations.

The above-mentioned regulations constitute the first set of amended local rules since the national Anti-Unfair Competition Law was revised in 2018. These developments have a significant impact on the prevention and enforcement of commercial bribery, and the management of compliance risks. Key points include:

(1) The introduction of the concept of “compliance management” into legislation, which requires business operators to establish and improve their compliance programmes – preventing commercial bribery is an explicit requirement of such compliance management;

(2) The granting of power to authorities for an inspection of an organisation’s implementation of their compliance programme in preventing commercial bribery; and

(3) The attachment of great importance to guidance from industry bodies and authorities on the establishment and improvement of compliance programmes.