What Penalties Can SAMR Impose for AML Violations?

The State Administration for Market Regulation (国家市场监督管理总局, SAMR, guójiā shìchǎng jiāndū guǎnlǐ zǒngjú) can impose penalties under China’s Anti-Monopoly Law (反垄断法, Anti-Monopoly Law, fǎn lǒng duàn fǎ) ranging from fines of up to 10% of the violator’s annual turnover in the preceding fiscal year to criminal liability for individuals. For unenforceable monopoly agreements, the maximum fine is RMB 50 million. These penalties are designed to deter anti-competitive behavior — between 2020 and 2023, SAMR investigated over 70 monopoly cases and fined companies a cumulative total exceeding RMB 3 billion across technology, pharmaceutical, and manufacturing sectors.

What Is the Maximum Fine for Monopoly Agreements?

Under Article 56 of the revised AML, companies that enter into horizontal monopoly agreements (e.g., price fixing, market allocation) face a fine of 1% to 10% of their annual turnover from the preceding fiscal year. If the agreement is not implemented, the fine is capped at RMB 50 million. Vertical monopoly agreements (e.g., resale price maintenance) carry similar fines, though SAMR has discretion to reduce penalties if the company can prove the agreement does not eliminate competition.

For legal representatives, directly responsible managers, and other individuals, personal fines range from RMB 50,000 to RMB 200,000. In egregious cases, SAMR may also impose disqualification orders, barring individuals from holding leadership roles in any company for up to five years.

What Are the Penalties for Abuse of Market Dominance?

Companies found abusing a dominant market position — such as charging unfairly high prices, refusing to deal, or tying products — face fines of 1% to 10% of annual turnover from the preceding fiscal year (Article 57). If turnover data is unavailable or unreliable, SAMR may impose a fine of up to RMB 10 million. In addition to fines, SAMR can order structural remedies — for example, requiring the company to divest assets or change its business structure to restore competition.

Timeline note: In a landmark 2021 case, SAMR fined Alibaba RMB 18.228 billion (4% of its 2019 domestic turnover) for abuse of dominance in the online retail platform market. That single fine equaled roughly 60% of all AML fines imposed in China from 2008 to 2020.

What Are the Penalties for Merger Control Violations (Gun-Jumping)?

If a company completes a merger or acquisition that meets mandatory notification thresholds without SAMR approval — known as “gun-jumping” — it faces a fine of up to RMB 5 million. If the concentration has or may have the effect of eliminating or restricting competition, SAMR may order the divestiture of assets, require behavioral remedies, or even require the company to unwind the transaction completely. In 2022, SAMR fined two tech companies RMB 200,000 each for failure to notify — but also required one to modify its business scope to address competitive concerns.

How Does SAMR Calculate Fines and What Mitigating Factors Exist?

SAMR calculates fines based on the violator’s turnover in the relevant market during the preceding fiscal year. The 1% to 10% range gives SAMR flexibility. Key mitigating factors include: cooperation with investigation, voluntary cessation of the violation, absence of prior violations, and implementation of a compliance program. Aggravating factors include: leading the agreement, coercion of others, hindering investigation, repeated violations, and causing serious market harm.

The statute of limitations for AML penalties is five years from the date the violation ends (Article 61). If the violation is ongoing, the clock does not start until it ceases.

Are There Leniency Programs and Settlement Mechanisms?

Yes — the AML provides a leniency program for companies that voluntarily report monopoly agreements before SAMR begins an investigation. The first whistleblower can receive full immunity or a reduction of up to 50% of the fine. The second qualifying whistleblower can receive a reduction of up to 30%, and subsequent whistleblowers up to 20%. Additionally, under the 2022 amendments, SAMR now has the authority to accept commitments from violators — if a company offers remedies that eliminate or mitigate anti-competitive effects, SAMR may suspend the investigation, effectively acting as a settlement mechanism.

The penalties under the AML are severe, and SAMR is actively enforcing them — with annual fine totals consistently exceeding RMB 1 billion since 2020. For foreign-invested enterprises operating in China, understanding these risks is essential for board-level compliance planning.

NEXT STEPS

1. Conduct an AML compliance audit — Review your pricing agreements, distribution contracts, and merger plans against SAMR thresholds. Read our AML Compliance Checklist for Foreign Companies.
2. Establish a notification protocol — For any M&A or joint venture meeting the turnover thresholds, submit a pre-notification to SAMR. Use our Merger Control Notification Guide.
3. Train your China leadership team — Ensure all executives understand personal liability risks. Download our China Competition Law Training Package.

— China Gateway 360 —
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Official Sources

• National Medical Products Administration
• National Health Commission of the People’s Republic of China
• Center for Drug Evaluation, National Medical Products Administration