New Rules Allow Businesses to Remove Operational Violations from Public Records 

Companies can now apply to have information related to abnormal business operations removed from the National Enterprise Credit Information Publicity System once violations are rectified. The new rules will help businesses rehabilitate their credit and create fairer market conditions.

China is enabling companies to scrub information that has been publicized related to abnormal business operations from a public platform, if they have been removed from the corresponding blacklist.

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In a notice published on May 27, 2025, China’s State Administration for Market Regulation (SAMR) stated it has updated the Administration Measures for the Abnormal Business Operations List (the “Administration Measures”) to allow companies to apply for the removal of information related to their abnormal business operations from the National Enterprise Credit Information Publicity System. Under the Administration Measures, companies must publicize information related to the abnormal business activity that landed them on the list on this platform.

The notice also stated that, to date, the National Enterprise Credit Information Publicity System has stopped publicizing the information of over 5 million enterprises, 20 million individual industrial and commercial households, and 362,400 farmers’ professional cooperatives.

The move seeks to improve businesses’ ability to repair their credit after they have been penalized for violations and create a fairer business environment.

The updated measures came into effect on May 1, 2025.

What is the abnormal operations list?

The abnormal operations list, or the List of Companies with Abnormal Operations, is one of a range of business backlists under China’s social credit system. Other lists include the Seriously Illegal and Dishonest Entities List and the National Basic List of Punishment Measures for Dishonest Conduct.

The abnormal operations list tracks companies penalized for lesser violations compared to the other two lists, with violations usually related to incomplete or out of date public business records.

This list, which has been implemented since 2014, punishes companies that:

• Fail to publish the requisite annual report or relevant enterprise information between January 1 and June 30 of the following year, as stipulated in the Interim Regulations on Enterprise Information Disclosure.
• Fail to publicize relevant enterprise information within 20 working days from the date of formation, as stipulated in the Interim Regulations on Enterprise Information Disclosure;
• In the event that a People’s Court or enterprise registration authority determines that a company’s name should be discontinued, fail to register the change of name within 30 days from the date of receipt of the effective legal document of the People’s Court or the decision of the enterprise registration authority, as stipulated in the Regulations on the Registration and Administration of Enterprise Names;
• Are unreachable through their registered address or place of business.

The “relevant enterprise information” mentioned in the second point above includes:

1. Information on the of capital subscribed and paid by shareholders of an LLC or promoters of a joint stock company, as well as the time and method of capital contribution, etc.;
2. Information on equity changes such as equity transfer of shareholders of an LLC;
3. Information on the acquisition, change and extension of administrative licenses;
4. Information on the registration of intellectual property rights pledge;
5. Information on administrative penalties; and
6. Any other information that must be disclosed by law.

Companies that are added to the abnormal operations list can be restricted or prohibited from participating in government procurement, project bidding, state-owned land transfers, and receiving honorary titles.

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Inclusion on the list can also hinder companies from accessing funding and banking services, as banks and financial institutions may consult this list when vetting a company in the process of providing loans, guarantees, and insurance.

Importantly, companies added to the list will have information regarding their abnormal operations publicized through the National Enterprise Credit Information Publicity System. This will be visible to potential partners, suppliers, and clients, thereby negatively impacting the company’s business prospects.

Applying for removal of abnormal operations records

The procedures for removal of the abnormal operations records depend on the violation that led to the inclusion on the list:

1. Failure to publish the annual report or relevant enterprise information within the requisite time limit: The company can apply to be removed from the list after submitting and publicizing the annual report of the unreported year.
2. Failure to publish the relevant enterprise information within the requisite time limit: The company can apply to be removed from the list after fulfilling its publicity obligations.
3. Failure to register the name change within the requisite time limit: The company can apply to be removed after registering the name change.
4. Cannot be contacted through the company’s registered address or place of business: The company can apply to be removed after changing the registration of its domicile or business premises or proposing that it can be re-contacted through the registered domicile or business premises.

In each of the above cases, the market supervision and administration department will make a decision on whether to remove the company from the list within five working days from receiving the application or verifying the required change has been made.

What the change means for businesses

A core intention of the social credit system is to enhance transparency for both businesses and consumers by enabling them to thoroughly vet the companies they engage with. By publicizing violations committed by businesses, stakeholders can make more informed decisions about which products and services to purchase, and companies can better evaluate potential suppliers or partners. However, inclusion on these violation lists can significantly impact a company’s ability to conduct business, and overly punitive measures risk undermining the broader business environment.

The latest change means that businesses that have rectified the issues will no longer have to worry about the long-term impact of inclusion on the list. It also provides an additional incentive for businesses placed on the list to rectify the issues that caused them to be included in the list. Given that the abnormal operations list is intended to tackle only minor violations, the change will make the system a bit fairer by not placing overly onerous penalties on businesses.

Improving China’s business environment

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China’s Social Credit System Raises Stakes for Dishonest Businesses

The change forms part of broader efforts to improve China’s social credit system, making it both fairer and more robust. On March 31, 2025, China issued a new policy document aiming to modernize the social credit system, including measures tightening enforcement against dishonest behavior.

China has also been seeking to improve the business environment more generally in order to improve business confidence and attract foreign investment. For instance, in June 2024, the State Council released the final version of the Fair Competition Review Regulations, which seek to level the playing field between state-owned and private companies by requiring authorities to conduct fair competition reviews when drafting laws, administrative regulations, local regulations, rules, normative documents, and policy measures. Earlier in 2024, China also released a set of measures to attract foreign investment, which include efforts to increase market access, in particular in manufacturing and financial services.

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