China Releases Draft Guidelines on Personal Liability for Monopoly Agreements
Published 3 September 2026
Xia Yu
On 27 August 2026, the State Administration for Market Regulation (“SAMR”) published the Guidelines on the Application of Personal Liability for Monopoly Agreements (Draft for Comments)(“Draft”), with a public comment period ending on 10 September 2026. The Draft consists of sixteen articles and is intended to further clarify the basic principles governing the application of personal liability for monopoly agreements, and to refine the circumstances of application and the sentencing factors for penalties. This seemingly technical guidance instrument, in reality, marks a pivotal institutional development in China’s anti-monopoly enforcement: while continuing to strengthen corporate liability, it formally extends the reach of accountability to individuals, thereby establishing a dual-liability regime encompassing both enterprises and individuals. Its promulgation implements the national policy decision to strengthen anti-monopoly enforcement, with the core objective of “achieving effective accountability of the de facto controllers and ultimate beneficiaries of monopolistic violators”.
Background
Article 56 of the Anti-Monopoly Law of the People’s Republic of China, as amended on 24 June 2022 (“AML”), provides: “Where a business operator, in violation of this Law, concludes and implements a monopoly agreement, the anti-monopoly law enforcement authority shall order it to cease the violation, confiscate its illegal gains, and impose a fine of not less than 1% but not more than 10% of its turnover from the preceding year; where there is no turnover from the preceding year, a fine of not more than RMB 5 million yuan shall be imposed; where the concluded monopoly agreement has not been implemented, a fine of not more than RMB 3 million yuan may be imposed. [The legal representative, the principal responsible person, and the directly responsible personnel of the business operator who bear personal responsibility for the conclusion of the monopoly agreement may each be fined not more than RMB 1 million…”
The newly added provision in Article 56—permitting the imposition of a fine of up to RMB 1 million (approximately US$148,900) on the legal representative, principal responsible person, and directly responsible personnel of a business operator that has concluded a monopoly agreement—marks the formal establishment in China of an administrative fine system for personal liability in monopoly agreement cases, and represents a major institutional shift from a single-enterprise liability regime to a “business operator plus individual” dual-penalty system. It should be emphasized that the fine liability borne by the enterprise itself (1% to 10% of its turnover from the preceding year) is neither mitigated nor abolished as a result; individual liability serves as an additional deterrent superimposed on that foundation. This provision has several characteristics, such as the liability is administrative in nature, not criminal; the scope of liable persons is limited to the three specified categories; the language is discretionary (“may”), meaning that personal penalties are not automatic upon a finding of a monopoly agreement, but rather leave room for enforcement discretion; and the base fine cap is RMB 1 million (approximately US$148,900), which may be escalated under Article 63 for particularly serious circumstances to two to five times the statutory fine, up to a maximum of RMB 5 million (approximately US$744,500).
However, the provision in Article 56 is relatively principled, and a series of practical questions urgently require clarification in enforcement practice: how to define the “principal responsible person”, the criteria for identifying “directly responsible personnel”, whether negligence is imputable, under what circumstances liability should be pursued, whether liability survives departure from the company, how investigatory procedures should be conducted, and so forth. To address these application difficulties, the SAMR, drawing on past enforcement experience in cases such as the bulk drug monopoly cases and with reference to extraterritorial regimes, formulated the Draft. The Draft is a reference guidance document without legally binding force and is intended primarily to refine the institutional framework. Articles 1 through 3 set forth the legislative purpose and basic principles; Articles 4 through 6 elaborate the scope of liability and circumstances giving rise to liability; Articles 7 through 10 specify the basis for penalties and sentencing factors; and Articles 11 through 16 address investigatory procedures and other matters.
Core Content of the Draft
1. Definition of Liable Persons
The Draft defines the “principal responsible person” and “directly responsible personnel”. Article 4 makes clear that the principal responsible person includes not only senior managers with operational decision-making authority other than the legal representative, but also controlling shareholders and de facto controllers. The inclusion of controlling shareholders and de facto controllers within the scope of liability reflects China’s consistent “look-through” approach to regulation. The determining criterion is not the identity or title of the manager, but whether the person “substantively participated” in the conclusion of the monopoly agreement. “Substantive participation” is manifested in three forms: (1) organizing, leading, deciding, or directing; (2) instigating, approving, or condoning; and (3) failing, within the scope of one’s duties, to exercise the requisite duty of care due to gross negligence or dereliction. The inclusion of “gross negligence” as a basis for imputation means that senior executives may no longer invoke “lack of knowledge” or “actions of subordinates” as a defense. This standard strikes a balance between setting the bar too high with an intent requirement—which would allow tacit acquiescence to go unpunished—and imposing liability for ordinary negligence, which would risk over-deterrence. The inclusion of negligence (rather than intent alone) as a basis for liability is relatively rare among global antitrust personal liability regimes, and effectively imposes on senior executives a “positive compliance obligation”—not merely to “do no wrong”, but also to “ensure that the enterprise does no wrong”.
Article 5 of the Draft defines “directly responsible personnel” as persons other than the legal representative and the principal responsible person who directly participate in the monopoly agreement, carry out acts such as planning, initiating, promoting, or supervising, and play a critical or substantial role in the conclusion of the monopoly agreement. At the same time, the Draft provides an important exemption: persons who can prove that they participated in the conclusion of the monopoly agreement under the direction or order of a superior shall generally not be pursued as directly responsible personnel. This design reflects a distinction between ordinary employees and core decision-makers—monopoly agreements are, in essence, an expression of the will of the enterprise’s decision-making stratum, and ordinary employees typically lack the authority to initiate or promote such agreements, nor do they could refuse.
2. Tiered Design of Conditions for Application
Article 6 of the Draft divides the application of personal liability into two categories: “shall be pursued” and “may be pursued”. Liability shall be pursued where: the monopoly agreement seriously excludes or restricts competition, seriously harms innovation or consumer welfare; the monopoly agreement has a significant national impact; or the monopoly agreement involves key areas such as people’s livelihood protection, ecological environment, work safety, financial capital, or data security, and harms national interests. In other circumstances, the enforcement authority may exercise discretion on a case-by-case basis. This design both ensures strong deterrence against serious violations and preserves discretionary space for ordinary cases. Personal fine liability is not an independent form of liability, but rather an “aggravated liability” superimposed on operator liability, the institutional purpose of which is to remedy any insufficiency in deterrence arising from operator-level penalties alone.
3. Sentencing Framework and Procedural Safeguards
Articles 7 through 10 of the Draft specify aggravating, enhanced, and mitigating circumstances to ensure that penalties are commensurate with the nature, circumstances, and consequences of the violation. Article 7 sets forth the basis for imposing personal liability in anti-monopoly cases and the factors to be considered in determining the specific fine amount. Articles 8 and 9 identify aggravating and enhanced circumstances, including repeated violations, and acts by the individual or at the individual’s instigation that obstruct, evade, or resist investigation. Article 10 identifies mitigating factors, including voluntary remediation of harmful consequences and acting under duress.
Article 13 of the Draft explicitly states that personal liability shall not be extinguished by resignation or other forms of departure. This provision significantly expands the temporal dimension of personal liability, meaning that senior executives cannot avoid historical liability by changing jobs. This is consistent with the regulatory logic of “lifetime accountability” that the China Securities Regulatory Commission has applied in recent years to violations in the capital markets.
Meanwhile, the Draft makes institutional arrangements for the effective operation of the leniency programme. The legal representative, principal responsible person, and directly responsible personnel of a business operator who bear personal liability and who voluntarily report to the anti-monopoly law enforcement authority information regarding the conclusion of a monopoly agreement and provide important evidence may receive mitigated or exempted penalties.
Conclusion
The promulgation of the Draft marks that, on the basis of maintaining stringent penalties on business operators, China’s anti-monopoly enforcement has further extended the chain of liability to individuals, thereby institutionalizing and refining the “enterprise-plus-individual” dual-penalty regime. This does not signify a shift in enforcement focus; rather, it represents a refinement of the comprehensive accountability system for monopolistic conduct—moving from principle-based legislation to operable and detailed rules. The Draft helps to establish the complete chain of monopolistic violations, achieve look-through accountability down to the individual level, and materially enhance the deterrent effect of anti-monopoly enforcement. For global antitrust practice, China is developing a liability pathway characterized by enterprise fines as the foundation, supplemented by administrative fines on individuals, and distinguished by look-through accountability—a pathway that draws on the U.S. model of criminal deterrence, builds upon and transcends the EU model of enterprise liability, and incorporates institutional innovations rooted in China’s regulatory tradition.
Background
Article 56 of the Anti-Monopoly Law of the People’s Republic of China, as amended on 24 June 2022 (“AML”), provides: “Where a business operator, in violation of this Law, concludes and implements a monopoly agreement, the anti-monopoly law enforcement authority shall order it to cease the violation, confiscate its illegal gains, and impose a fine of not less than 1% but not more than 10% of its turnover from the preceding year; where there is no turnover from the preceding year, a fine of not more than RMB 5 million yuan shall be imposed; where the concluded monopoly agreement has not been implemented, a fine of not more than RMB 3 million yuan may be imposed. [The legal representative, the principal responsible person, and the directly responsible personnel of the business operator who bear personal responsibility for the conclusion of the monopoly agreement may each be fined not more than RMB 1 million…”
The newly added provision in Article 56—permitting the imposition of a fine of up to RMB 1 million (approximately US$148,900) on the legal representative, principal responsible person, and directly responsible personnel of a business operator that has concluded a monopoly agreement—marks the formal establishment in China of an administrative fine system for personal liability in monopoly agreement cases, and represents a major institutional shift from a single-enterprise liability regime to a “business operator plus individual” dual-penalty system. It should be emphasized that the fine liability borne by the enterprise itself (1% to 10% of its turnover from the preceding year) is neither mitigated nor abolished as a result; individual liability serves as an additional deterrent superimposed on that foundation. This provision has several characteristics, such as the liability is administrative in nature, not criminal; the scope of liable persons is limited to the three specified categories; the language is discretionary (“may”), meaning that personal penalties are not automatic upon a finding of a monopoly agreement, but rather leave room for enforcement discretion; and the base fine cap is RMB 1 million (approximately US$148,900), which may be escalated under Article 63 for particularly serious circumstances to two to five times the statutory fine, up to a maximum of RMB 5 million (approximately US$744,500).
However, the provision in Article 56 is relatively principled, and a series of practical questions urgently require clarification in enforcement practice: how to define the “principal responsible person”, the criteria for identifying “directly responsible personnel”, whether negligence is imputable, under what circumstances liability should be pursued, whether liability survives departure from the company, how investigatory procedures should be conducted, and so forth. To address these application difficulties, the SAMR, drawing on past enforcement experience in cases such as the bulk drug monopoly cases and with reference to extraterritorial regimes, formulated the Draft. The Draft is a reference guidance document without legally binding force and is intended primarily to refine the institutional framework. Articles 1 through 3 set forth the legislative purpose and basic principles; Articles 4 through 6 elaborate the scope of liability and circumstances giving rise to liability; Articles 7 through 10 specify the basis for penalties and sentencing factors; and Articles 11 through 16 address investigatory procedures and other matters.
Core Content of the Draft
1. Definition of Liable Persons
The Draft defines the “principal responsible person” and “directly responsible personnel”. Article 4 makes clear that the principal responsible person includes not only senior managers with operational decision-making authority other than the legal representative, but also controlling shareholders and de facto controllers. The inclusion of controlling shareholders and de facto controllers within the scope of liability reflects China’s consistent “look-through” approach to regulation. The determining criterion is not the identity or title of the manager, but whether the person “substantively participated” in the conclusion of the monopoly agreement. “Substantive participation” is manifested in three forms: (1) organizing, leading, deciding, or directing; (2) instigating, approving, or condoning; and (3) failing, within the scope of one’s duties, to exercise the requisite duty of care due to gross negligence or dereliction. The inclusion of “gross negligence” as a basis for imputation means that senior executives may no longer invoke “lack of knowledge” or “actions of subordinates” as a defense. This standard strikes a balance between setting the bar too high with an intent requirement—which would allow tacit acquiescence to go unpunished—and imposing liability for ordinary negligence, which would risk over-deterrence. The inclusion of negligence (rather than intent alone) as a basis for liability is relatively rare among global antitrust personal liability regimes, and effectively imposes on senior executives a “positive compliance obligation”—not merely to “do no wrong”, but also to “ensure that the enterprise does no wrong”.
Article 5 of the Draft defines “directly responsible personnel” as persons other than the legal representative and the principal responsible person who directly participate in the monopoly agreement, carry out acts such as planning, initiating, promoting, or supervising, and play a critical or substantial role in the conclusion of the monopoly agreement. At the same time, the Draft provides an important exemption: persons who can prove that they participated in the conclusion of the monopoly agreement under the direction or order of a superior shall generally not be pursued as directly responsible personnel. This design reflects a distinction between ordinary employees and core decision-makers—monopoly agreements are, in essence, an expression of the will of the enterprise’s decision-making stratum, and ordinary employees typically lack the authority to initiate or promote such agreements, nor do they could refuse.
2. Tiered Design of Conditions for Application
Article 6 of the Draft divides the application of personal liability into two categories: “shall be pursued” and “may be pursued”. Liability shall be pursued where: the monopoly agreement seriously excludes or restricts competition, seriously harms innovation or consumer welfare; the monopoly agreement has a significant national impact; or the monopoly agreement involves key areas such as people’s livelihood protection, ecological environment, work safety, financial capital, or data security, and harms national interests. In other circumstances, the enforcement authority may exercise discretion on a case-by-case basis. This design both ensures strong deterrence against serious violations and preserves discretionary space for ordinary cases. Personal fine liability is not an independent form of liability, but rather an “aggravated liability” superimposed on operator liability, the institutional purpose of which is to remedy any insufficiency in deterrence arising from operator-level penalties alone.
3. Sentencing Framework and Procedural Safeguards
Articles 7 through 10 of the Draft specify aggravating, enhanced, and mitigating circumstances to ensure that penalties are commensurate with the nature, circumstances, and consequences of the violation. Article 7 sets forth the basis for imposing personal liability in anti-monopoly cases and the factors to be considered in determining the specific fine amount. Articles 8 and 9 identify aggravating and enhanced circumstances, including repeated violations, and acts by the individual or at the individual’s instigation that obstruct, evade, or resist investigation. Article 10 identifies mitigating factors, including voluntary remediation of harmful consequences and acting under duress.
Article 13 of the Draft explicitly states that personal liability shall not be extinguished by resignation or other forms of departure. This provision significantly expands the temporal dimension of personal liability, meaning that senior executives cannot avoid historical liability by changing jobs. This is consistent with the regulatory logic of “lifetime accountability” that the China Securities Regulatory Commission has applied in recent years to violations in the capital markets.
Meanwhile, the Draft makes institutional arrangements for the effective operation of the leniency programme. The legal representative, principal responsible person, and directly responsible personnel of a business operator who bear personal liability and who voluntarily report to the anti-monopoly law enforcement authority information regarding the conclusion of a monopoly agreement and provide important evidence may receive mitigated or exempted penalties.
Conclusion
The promulgation of the Draft marks that, on the basis of maintaining stringent penalties on business operators, China’s anti-monopoly enforcement has further extended the chain of liability to individuals, thereby institutionalizing and refining the “enterprise-plus-individual” dual-penalty regime. This does not signify a shift in enforcement focus; rather, it represents a refinement of the comprehensive accountability system for monopolistic conduct—moving from principle-based legislation to operable and detailed rules. The Draft helps to establish the complete chain of monopolistic violations, achieve look-through accountability down to the individual level, and materially enhance the deterrent effect of anti-monopoly enforcement. For global antitrust practice, China is developing a liability pathway characterized by enterprise fines as the foundation, supplemented by administrative fines on individuals, and distinguished by look-through accountability—a pathway that draws on the U.S. model of criminal deterrence, builds upon and transcends the EU model of enterprise liability, and incorporates institutional innovations rooted in China’s regulatory tradition.