On 26 September 2013, the Ministry of Human Resources and Social Security (MOHRSS) issued new Administrative Regulations on the Declaration and Contribution of Social Insurance Contributions, which took effect from 1 November 2013, and replaced the measures related to social insurance contributions that had been issued in 1999.
The most important provisions under the new contributions regulations further strengthen and clarify the enforcement measures that can be taken against companies that are non-compliant.
The Social Insurance Law stipulated in very general terms some enforcement actions that local social insurance bureaus are authorised to take against non-compliant companies, such as issuance of payment orders to the company’s banks, freezing assets and auctioning company property. But the law did not provide any further guidance as to how exactly such measures could be implemented in practice.
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The contributions regulations provide more teeth to these potential enforcement measures by specifying the exact procedures to implement such measures, such as steps that can be taken to directly collect money from the employer’s bank account, and the exact documentary and procedural requirements for obtaining court orders for the seizure of assets.
It remains to be seen whether local authorities will take advantage of these new tools and be more aggressive in their enforcement than in the past.
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Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mail at: Zhang Danian (Shanghai) danian.zhang@bakermckenzie.com
