China has launched work to thoroughly crack down on and control illegal and criminal activities related to telecom and online fraud in recent years, which has made remarkable results. Simultaneously with this, the Standing Committee of the National People's Congress, the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security have adhered to a problem-oriented approach to solving governance difficulties through the rule of law. They have comprehensively summarized the anti-fraud work practices, made in-depth analysis of the patterns and characteristics of telecom and online fraud crimes, and carefully identified loopholes and weak links in the regulation of telecommunications, financial and Internet industries. The anti-fraud legal system has been constantly improved, and a series of laws, judicial interpretations and legal guiding opinions have been successively formulated and introduced to provide important legal support and strong legal guarantee for cracking down on and controlling telecom and online fraud crimes.
The Law on Combating Telecom and Online Fraud has been enacted to conduct governance at the source
In order to prevent, curb and punish telecom and online fraud and strengthen the combat against telecom and online fraud, the National People's Congress launched the legislative work of the Law on Combating Telecom and Online Fraud in April 2021. The Law was adopted in September 2022 and came into force on December 1, 2022 after more than one year of study, demonstration and opinion solicitation and submission to the Standing Committee of the Thirteenth National People's Congress for deliberation three times. It is China's first special, systematic and complete law that regulates the work of combating telecom and online fraud, a landmark achievement in China's work of cracking down on and controlling telecom and online fraud, and a successful exploration and great practice of the anti-telecom and online fraud system with Chinese characteristics.
For the first time, the Law has defined the legal concept of telecom and online fraud, determined the jurisdictional rules, proposed the working principles of adhering to governance at the source, comprehensive governance, joint action, mass prevention and governance and precise prevention and control, and established a series of effective institutional measures.
-The Law has improved the governance system. It clarifiess the State Council's anti-fraud joint meeting mechanism and the public security organs' responsibility to take the lead, and improves the anti-fraud governance system with local government's territorial responsibilities, competent industry departments' regulation responsibilities and procuratorial, judicial and public security departments' punishment responsibilities as the center.
-The Law has stipulated enterprises' responsibilities. It defines the fraud risk prevention and control responsibilities of telecommunications, financial and Internet enterprises and strengthens the assessment of fraud risks of new business; stipulates that for those who violate the provisions of the law, competent industry departments can impose administrative punishment, including suspending business, revoking licenses and imposing fines, and those who cause damage to others shall bear civil liability.
-The Law has emphasized the implementation of the real name system. It stipulates the true information registration system for phone cards and Internet services and requires establishing a sound due diligence system for financial services; stipulates that abnormal phone cards, bank accounts and Internet accounts shall be re-verified the identity information and cannot continue to be used if they fail the verification.
-The Law has strengthened the governance of the black market. It emphasizes the monitoring and governance of phone calls with changed phone numbers, false calling and fraud-involved equipment, apps and domain names. It stipulates that for those who illegally manufacture, trade, provide or use related equipment or software or provide support or help for telecom fraud activities, the public security organs may confiscate the illegal income from, impose fines on and detain them.
-The Law has strengthened the punishment. It stipulates that persons engaged in telecom and online fraud crimes and associated crimes shall be recorded in the credit history and taken corresponding disciplinary measures; those who do not constitute a crime may be administratively detained and fined; those who cause damage to others shall also bear civil liability.
In addition, the Law clearly requires that while related governance measures are applied according to law, smooth relief and appeal channels shall be established and the principle of "whoever makes a decision shall be responsible" shall be followed to timely accept and solve the masses' appeals and ensure normal production and business activities and the masses' convenient living.
The Amendment (IX) to the Criminal Law has been promulgated to severely crack down on the online black market
With the rapid development of network information technology, the scale of illegal online black market that includes behaviors of malicious registration of network accounts, sales of user data, production of phishing websites and implementation of network attacks has soared and a closely linked upstream and downstream industrial ecology has formed, which aids telecom and online fraud and other cybercrimes, reduces the cost of crime, enriches the means of crime, increases the combating difficulty and causes very severe harm.
In order to effectively crack down on the online black market, purify the network environment and squeeze the space of the development and spread of telecom and online fraud, the Amendment (IX) to the Criminal Law promulgated in August 2015 has added the crime of assisting with information network-related criminal activities (hereinafter referred to as the "Crime") and stipulated that whoever, while knowing that any other person is committing a crime by using an information network, provides support and assistance for the crime shall, if the circumstances are serious, be held criminally liable. On this basis, in October 2019, the Supreme People's Court and the Supreme People's Procuratorate jointly issued the Interpretations on Several Issues concerning the Application of Law in Handling Criminal Cases Involving Crimes of Illegally Using an Information Network or Providing Aid for Criminal Activities in Relation to Information Network to further define the sentencing standards for the Crime and the application of the related laws, which has provided an important legal basis for the Chinese police to crack down on and control the online black market and the crimes related to telecom and online fraud and played an important role.
Since the Ministry of Public Security of China launched the "card cutting" campaign in October 2020, police across China have cracked down on a large number of criminals who illegally trading, renting and lending phone and bank cards and Internet accounts by applying standards for the Crime according to law. At the same time, procuratorial organs and judicial authorities have prosecuted and tried a large group of criminals by also applying standards for the Crime. These actions have strongly promoted the crackdown on and control of telecom and online fraud at the source and realized a year-on-year decline in the incidence of telecom and online fraud cases for 17 consecutive months.
Legal guiding opinions have been introduced to solve difficult problems in the application of law
In order to define the standards of application of law in handling telecom and online fraud cases and solve the prominent problems generally existing in judicial practice, the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security jointly issued the Opinions on Several Issues concerning the Application of Law in the Handling of Telecom and Online Fraud and other Criminal Cases and the Opinions II in December 2016 and June 2021, respectively. The two legal guiding documents emphasize strict, comprehensive and accurate punishment of illegal and criminal activities related to telecom and online fraud according to law.
-The two legal guiding documents stipulate the minimum standards of criminalization and strictly control suspended sentences. They stipulate the amount of not less than RMB 3,000 for criminalization related to telecom and online fraud involving public or private property. With respect to a defendant committing telecom and online fraud, the scope of application of suspended sentences shall be strictly controlled and the conditions for the application of suspended sentences shall be strictly mastered.
-The two legal guiding documents define the circumstances in which heavier punishment shall be imposed. These circumstances include causing suicide or death of a victim of fraud; committing fraud by posing as the functionary of a judiciary or any other state department; committing fraud overseas; defrauding the disabled, the elderly, minors and students of property; and organizing or directing a telecom and online fraud gang.
-The two legal guiding documents stipulate a crackdown on relative offenses. They stipulate punishment for upstream and downstream relative offenses of telecom and online fraud, such as infringing upon the personal information of citizens, assisting with information network-related criminal activities and covering up and concealing gains from crimes.
-The two legal guiding documents focus on solving cross-border telecom and online fraud crimes. They stipulate that if an actor goes overseas to join a telecom fraud criminal gang and if he or she stays in the overseas hideout for cumulatively more than 30 days in a year or repeatedly leaves the country to go to a fraud hideout, he or she will be held criminally liable for the crime of (attempted) fraud.
-The two legal guiding documents focus on solving the application of law related to crimes involving phone and bank cards. They stipulate that the illegal purchase, sale or rental of more than five bank cards or the purchase, sale or rental of more than 20 phone cards, data cards or Internet of things cards of other people constitutes the crime of assisting with information network-related criminal activities.
In addition, the two legal guiding documents also adhere to the criminal policy of combining leniency with rigidity. They stipulate that the organizers, planners, directors and core members of telecom and online fraud criminal gangs shall be severely punished according to law, and the accomplices, first-time offenders, occasional offenders, minors, students, etc. can be given lighter or mitigated penalties according to law.