Guiding Case No. 5 (Discussed and Passed by the Adjudication Committee of the Supreme People s Court Released on April 9, 2012)

Transcription

1 Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch v. The Salt Administration Bureau of Suzhou Municipality, Jiangsu Province, A Salt Industry Administrative Penalty Case Guiding Case No. 5 (Discussed and Passed by the Adjudication Committee of the Supreme People s Court Released on April 9, 2012) CHINA GUIDING CASES PROJECT English Guiding Case (EGC5) June 30, 2015 Edition * * The citation of this translation of the Guiding Case is: 鲁潍 ( 福建 ) 盐业进出口有限公司苏州分公司诉江苏省苏州市盐务管理局盐业行政处罚案 (Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch v. The Salt Administration Bureau of Suzhou Municipality, Jiangsu Province, A Salt Industry Administrative Penalty Case), CHINA GUIDING CASES PROJECT, English Guiding Case (EGC5), June 30, 2015 Edition, available at This document was primarily prepared by CUI Heshan, REN He, Christine Qingyu Liu, Carl Rubinstein, Joelle Tjahjadi, WEI Chuchu, and Randy Wu. The document was finalized by Dimitri Phillips, Jordan Corrente Beck, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects formatting of the Chinese document released by the Supreme People s Court. The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People s Court of the People s Republic of China and was released on April 9, 2012, available at See also 最高人民法院关于发布第二批指导性案例的通知 (The Supreme People s Court s Notice Concerning the Release of the Second Batch of Guiding Cases), Apr. 9, 2012, available at

2 2 Keywords Administrative Administrative Licensing Administrative Penalty Refer to Rules Salt Industry Administration Main Points of the Adjudication 1. [Since] the laws and administrative regulations on salt industry administration do not establish administrative licensing for industrial salt transportation permits, neither local regulations nor local government rules can establish any new administrative licensing for industrial salt transportation permits. 2. [Since] the laws and administrative regulations on salt industry administration do not impose administrative penalties on [any] enterprises other than salt industry companies for operating salt wholesale business, local government rules cannot establish administrative penalties for this behavior. 3. Where local government rules establish licensing or penalties in violation of legal provisions, the people s courts [shall] not apply [the local government rules] in administrative adjudication. Related Legal Rule(s) 1. Article 15, Paragraph 1; Article 16, Paragraph 2 and Paragraph 3 of the Administrative Licensing Law of the People s Republic of China 1 2. Article 13 of the Administrative Penalties Law of the People s Republic of China 2 3. Article 53, Paragraph 1 of the Administrative Litigation Law of the People s Republic of China; 3 Article 79 of the Legislation Law of the People s Republic of China 4 1 中华人民共和国行政许可法 (Administrative Licensing Law of the People s Republic of China), passed and issued on Aug. 27, 2003, effective as of Jul. 1, 2004, available at 2 中华人民共和国行政处罚法 (Administrative Penalties Law of the People s Republic of China), passed and issued on Mar. 17, 1996, effective as of Oct.1, 1996, amended and effective as of Aug. 27, 2009, available at and 3 中华人民共和国行政诉讼法 (Administrative Litigation Law of the People s Republic of China), passed and issued on Apr. 4, 1989, effective as of Oct. 1, 1990, amended on Nov. 1, 2014, effective as of May 1,

3 3 Basic Facts of the Case Plaintiff Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch ( 鲁潍 ( 福建 ) 盐业进出口有限公司苏州分公司 ) (hereinafter referred to as Luwei Company ) claimed: the Salt Administration Bureau of Suzhou Municipality, Jiangsu Province ( 江苏省苏州市盐务管理局 ) (hereinafter referred to as the Suzhou Salt Bureau ), the defendant, pursuant to the Implementing Measure of Jiangsu Province on the Salt Industry Administration Regulation (hereinafter referred to as the Jiangsu Salt Industry Implementing Measure ), 5 determined that Luwei Company s purchase and transportation of industrial salt without approval was illegal, and imposed administrative penalties on Luwei Company. The specific administrative act [of the Suzhou Salt Bureau demonstrated] enforcement of law by the wrong body, as well as an erroneous application of law. The Suzhou Salt Bureau had no authority to conduct industrial salt administration and had no corresponding law enforcement power. According to various provisions including those in the Notice on the Measure for Improving the Supply, Sale, and Price Control of Industrial Salt [issued by] the former State Planning Commission and the former State Economic and Trade Commission, 6 the State had cancelled the transportation permit and the transportation seal systems for industrial salt, and industrial salt was not a commodity whose trade was restricted by the State. The relevant provisions of the Jiangsu Salt Industry Implementing Measure were inconsistent with the spirit of the aforementioned provisions. They not only violated the State Council s Provisions on the Prohibition of Regional Blockades in 2015, available at A full text version of the Administrative Litigation Law of the People's Republic of China as first passed is available at (hereinafter Old Administrative Litigation Law ). In this Guiding Case, all references to the Administrative Litigation Law are to the Old Administrative Litigation Law because the Guiding Case was released prior to the amendment of the law. 4 中华人民共和国立法法 (Legislation Law of the People's Republic of China), passed and issued on Mar. 15, 2000, effective as of July 1, 2000, amended on and effective as of Mar. 15, 2015, available at A full text version of the Legislation Law of the People's Republic of China as first passed is available at (hereinafter Old Legislation Law ). In this Guiding Case, all references to the Legislation Law are to Old Legislation Law because the Guiding Case was released prior to the amendment of the law. 5 江苏省 盐业管理条例 实施办法 (Implementing Measure of Jiangsu Province on the Salt Industry Administration Regulation ), passed by the People s Government of Jiangsu Province on June 27, 1991, issued on and effective as of Oct. 4, 1991, amended four times, most recently on Feb. 16, 2012, effective as of Feb. 26, 2012, available at 5f38ff2b1608&categoryNum= and 6 国家计委 国家经贸委关于改进工业盐供销和价格管理办法的通知 (Notice of the State Planning Commission and the State Economic and Trade Commission on the Measure for Improving the Supply, Sale, and Price Control of Industrial Salt), issued by the State Planning Commission and the State Economic and Trade Commission on and effective as of Nov. 8, 1995, available at (stating that the current planned allocation of industrial salt is changed to contract orders made under the guidance of the State Plan on Total Quantity and that the current systems on industrial salt transportation permits and seals are cancelled. )

4 4 Market Economic Activities, 7 but also violated provisions of the Administrative Licensing Law of the People s Republic of China (hereinafter referred to as the Administrative Licensing Law ) and the Administrative Penalties Law of the People s Republic of China (hereinafter referred to as the Administrative Penalties Law ). [These violations] were a type of establishment of administrative licensing and penalties in violation of upper-level legislation. Therefore, [the plaintiff] requested that the court revoke the (Su) Yan Zheng Yi Ban [2009] No. 001-B Penalty Decision made by the Suzhou Salt Bureau. The Suzhou Salt Bureau, the defendant, defended its position, claiming: based on Article 4 of the State Council s Salt Industry Administration Regulation 8 and Article 4 of the Jiangsu Salt Industry Implementing Measure, the Suzhou Salt Bureau had the corresponding authority to impose administrative penalties in the salt industry. The Jiangsu Salt Industry Implementing Measure was formulated in accordance with the authority granted by the Salt Industry Administration Regulation. [Thus,] it was a type of [legislation] authorized by regulations and was legal and valid in its entirety. The administrative penalties imposed by the Suzhou Salt Bureau in accordance with the provisions on the transportation permit system stated in the Jiangsu Salt Industry Implementing Measure were not inappropriate. The Administrative Licensing Law and the Administrative Penalties Law were all implemented after the Jiangsu Salt Industry Implementing Measure. According to the provisions of the Legislation Law of the People s Republic of China (hereinafter referred to as the Legislation Law ) [stating] that laws do not apply retroactively, the Jiangsu Salt Industry Implementing Measure should still be applicable. Luwei Company s acts of purchasing industrial salt without the approval of the [Jiangsu] Province Salt Industry Company or the salt industry administrative departments violated the relevant provisions of the Salt Industry Administration Regulation. In the penalty decision made by the Suzhou Salt Bureau, the facts were ascertained clearly, the evidence was conclusive, the application of regulations and regulatory documents was correct, and the procedure was legal. [The defendant] requested that the court reject Luwei Company s litigation request. The court handled the case and ascertained: on November 12, 2007, Luwei Company purchased 360 tons of industrial salt from Jiangxi and other places. The Suzhou Salt Bureau believed that Luwei Company should have applied for an industrial salt transportation permit in accordance with the provisions of the Jiangsu Salt Industry Implementing Measure when purchasing, selling, or transporting industrial salt. By purchasing industrial salt from outside the province without applying for an industrial salt transportation permit, Luwei Company was suspected of having violated the law. On February 26, 2009, the Suzhou Salt Bureau opined, after a hearing and a collective discussion, that Luwei Company s acts of purchasing salt 7 国务院关于禁止在市场经济活动中实行地区封锁的规定 (Provisions of the State Council on the Prohibition of Regional Blockades in Market Economic Activities), issued by the State Council on and effective as of Apr. 21, 2001, available at 8 盐业管理条例 (Salt Industry Administration Regulation), passed by the State Council on Feb. 9, 1990, issued and effective as of Mar. 2, 1990, available at

5 5 products from outside the province without going through the allocation of Jiangsu Province Salt Industry Company or receiving the approval of the salt industry administrative departments, violated Article 20 of the Salt Industry Administration Regulation as well as Article 23 and Article 32, Item (2) of the Jiangsu Salt Industry Implementing Measure. Pursuant to Article 42 of the Jiangsu Salt Industry Implementing Measure, [the Suzhou Salt Bureau] issued the (Su) Yan Zheng Yi Ban [2009] No. 011-B Penalty Decision, deciding to confiscate tons of the refined industrial salt and 93.1 tons of the powdered salt that Luwei Company purchased illegally and imposed a fine of 122,363 yuan. Luwei Company was dissatisfied with the decision and applied to the People s Government of Suzhou Municipality on February 27 for an administrative reconsideration. The People s Government of Suzhou Municipality issued the [2009] Su Xing Fu No. 8 Reconsideration Decision on April 24, upholding the penalty decision made by the Suzhou Salt Bureau. Results of the Adjudication On April 29, 2011, the Jinchang District People s Court of Suzhou Municipality, Jiangsu Province, by the (2009) Jin Xing Chu Zi No Administrative Judgment, decided to revoke the Suzhou Salt Bureau s (Su) Yan Zheng Yi Ban [2009] No. 001-B Penalty Decision. Reasons for the Adjudication In its effective judgment, the court opined: the Suzhou Salt Bureau was the salt industry administrative department of the People s Government of Suzhou Municipality. Pursuant to Article 4 of the Salt Industry Administration Regulation and Article 4 and Article 6 of the Jiangsu Salt Industry Implementing Measure, [the Bureau] had the authority to carry out administration of salt business activities, including industrial salt [business activities], within Suzhou Municipality, and it had the subject qualification to legally enforce the law. The Suzhou Salt Bureau should apply legal and valid legal norms when investigating and handling law violations in the salt industry. Article 79 of the Legislation Law provides that the effect of laws is greater than that of administrative regulations, local regulations, and rules; and the effect of administrative regulations is greater than that of local regulations and rules. 9 The Suzhou Salt Bureau s specific administrative act concerned administrative licensing and administrative penalties and should thus be implemented in accordance with the Administrative Licensing Law and the Administrative Penalties Law. [The principle that] laws do not apply retroactively means that legal provisions are only applicable to events and behavior that take place after the law comes into effect and are not applicable to events and behavior that take place 9 Old Legislation Law, supra note 4. Present tense is used here because the law was still effective when Guiding Case No. 5 was released.

6 6 before the law comes into effect. Article 83, Paragraph 2 of the Administrative Licensing Law provides that for those provisions on administrative licensing that were [issued] prior to the implementation of this law, the formulating organs should clean up in accordance with the provisions of this law, [in the sense that] if a provision is inconsistent with this law, it shall cease to be enforced on the date of implementation of the law. Article 64, Paragraph 2 of the Administrative Penalties Law provides that those provisions of regulations and rules on administrative penalties formulated before the issuance of this law that do not comply with this law should, beginning from the date of issuance of this law, be revised according to the provisions of this law. The revisions were to be completed by December 31, Thus, the Suzhou Salt Bureau s grounds for defense that [the relevant] laws do not apply retroactively could not stand. Pursuant to Article 15, Paragraph 1 and Article 16, Paragraph 3 of the Administrative Licensing Law, under circumstances where laws and administrative regulations have already been formulated, local government rules can only, within the scope of administrative licensing matters established by laws and administrative regulations, make specific provisions for implementing that administrative licensing and cannot establish new administrative licensing. [Since] the laws and the Salt Industry Administration Regulation did not establish administrative licensing for industrial salt transportation permits, local government rules could not establish an industrial salt transportation permit system. According to Article 13 of the Administrative Penalties Law, under circumstances where administrative regulations have already been formulated, local government rules can only make specific provisions within the scope of those acts subject to administrative penalties and the types and range [of these penalties] as prescribed by the administrative regulations. [Since] the Salt Industry Administration Regulation did not impose administrative penalties on any enterprises other than salt industry companies for operating salt wholesale business, local government rules could not establish administrative penalties on this behavior. In adjudicating administrative cases, the people s courts [shall] use laws, administrative regulations, and local regulations as bases [for their adjudication] and [may] refer to rules. In following its authority to impose administrative penalties on Luwei Company, although the Suzhou Salt Bureau applied the Jiangsu Salt Industry Implementing Measure, it did not abide by the provisions regarding the hierarchy of legal effect stated in Article 79 of the Legislation Law, [and] did not follow the relevant provisions in the Administrative Licensing Law and the Administrative Penalties Law. The application of law was erroneous and [the Bureau s decision] should be revoked in accordance with law.