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China Ocean Development Bureau abuses administrative powers

This May the Administration for Market Regulation (the AMR) of Shandong Province (East China) launched an investigation into the local Ocean Development Bureau, which had reportedly abused its administrative powers to restrict competition.
As discovered, since the beginning of 2020 the Ocean Development Bureau of Rongcheng City, had requested local shipowners to take out insurance nowhere else but at Fishing Mutual Insurance Association or, otherwise, refused to approve their fishing licenses during annual revision. Due to such request of the public authority, other insurance agencies were unable to perform their usual operations in insurance sector.

While no law or regulation had ruled so, the Bureau in question made an insurance by the above said Association the compulsory condition of satisfactory revision and thus limited the competition on relevant market and disturbed healthy market order. Such actions violated the Art. 32 of the Anti-Monopoly Law of China, which stipulated:

Administrative agencies and organizations empowered by laws and regulations administer public issues shall not abuse their administrative powers by limiting, or limiting in a different form, organizations or persons to operate, purchase or use commodities of any undertakings designated by them.

On June 6, the Bureau submitted the Rectification Report, undertaking not to indicate an insurance provider anymore. According to the Interim Provisions on Prohibiting the Acts of Eliminating or Restricting Competition by Abuse of Administrative Power, effective from September 2019, if during the investigation the person in question voluntarily takes measures to stop unlawful behavior and to eliminate its consequences, the AML enforcement body may call the investigation off. Considering the active cooperation of the Bureau, the respective investigation was closed, and recently the case introduction has become available on the Shandong antitrust enforcer’s official website.