Draft details penalties for fraudsters

Non-prison measures to further limit scammers' banking, telecom activities

Authorities are planning to introduce graded punishments for telecom scammers and entities in the sectors of finance, telecom networks and credit, according to a newly released draft.

The Ministry of Public Security issued the draft of the Joint Disciplinary Measures for Telecom Fraud and Related Crimes to solicit public opinions on Monday, one of the latest moves to combat telecom fraud.

China's Anti-telecom and Online Fraud Law, which took effect on Dec 1 last year, stipulates that specific measures for joint disciplinary actions to punish telecom scammers shall be determined by the public security departments in conjunction with relevant authorities.

The draft covers disciplinary principles, subjects, measures, graded discipline, procedures and appeals. It adheres to the principles of lawful determination, proportionate punishment and dynamic management, aiming to prevent such crimes.

Individuals and entities would be subject to disciplinary measures if they are involved in trading, renting or lending three or more items, including phone cards, internet of things chips, fixed-line phones, telecom lines, SMS ports, bank accounts, digital RMB wallets, payment accounts, internet accounts, domains or IP addresses, or provide assistance for real-name verification for three or more such cards and accounts.

People who register such cards or accounts by impersonating others or fabricating proxy relationships, will be targets for disciplinary action.

During the disciplinary period, financial institutions and nonbank payment institutions will temporarily suspend disciplined individuals' withdrawals from bank accounts and digital wallets under their names, and all transactions on their payment accounts. They will not be allowed to register for new payment accounts and digital wallets.

Telecom operators will also suspend various communication services for disciplined individuals, such as phone cards, IoT chips, fixed-line phones, telecom lines and website domains, with exemptions for communication services related to production, operation or life and health. Disciplinary individuals will only be allowed to retain one noncase-related phone card.

Their registered internet accounts carrying fraud risks under the phone cards will be suspended. Also, they will be banned from applying for new communication services.

The Ministry of Public Security will share information about the disciplined individuals on the national credit information sharing platform and publicly disclose severely dishonest individuals.

The People's Bank of China will incorporate the information about disciplined individuals into the national financial credit information base.

The draft also introduces graded discipline based on the severity of the offenses, and regulates the procedures for review, the duration of disciplinary action, notification and appeal processes.

In maintaining proportional discipline, the draft sets a disciplinary period of three years for individuals held criminally responsible for telecom fraud and related crimes and two years for individuals determined by municipal-level or higher public security departments.

According to the draft, for disciplined individuals sentenced to imprisonment, the disciplinary period will be calculated from the date of completion of the imprisonment sentence.