China's Supreme People's Court targets payment defaulters

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China's Supreme People's Court targets payment defaulters

(Xinhua) 08:03, November 06, 2013

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China's Supreme People's Court (SPC) is considering more punitive measures for those who have defaulted on court fines after an online database enables the public to check their names.

According to a SPC statement released Tuesday, the court is cooperating with the Credit Reference Center under the People's Bank of China, China Securities Regulatory Commission, the Ministry of Public Security and other departments to impose more pressure on those included in the defaulters database in order to make them fulfill court judgments sooner.

Currently, the database is shared with state-owned banks for them to punish parties in lawsuits who fail to pay damages by freezing and transferring bank account funds or declining loan requests, according to a memorandum of understanding signed between the SPC and state-owned banks.

The state-owned banks include the Industrial and Commercial Bank of China, Agricultural Bank of China, the Bank of China, China Construction Bank and Bank of Communications.

"Those on the blacklist will be limited or banned from various activities such as government procurement, tender, administrative approval, credit loans... Their activities will be restricted," said Liu Guixiang, a senior SPC official.

SPC figures showed that 31,259 defaulters had been submitted by courts across the country to the list as of Monday, and the online database had been visited 180,000 times since it was launched on Oct. 24.

Of the number of defaulters, 25,625 are individuals are the rest are companies.

Half of the defaulters refused to follow court orders by fabricating evidence and carrying out violence and threats. Other methods involved hiding and transferring properties.

According to the statement, more companies and individuals are resorting to the database for background checks before reaching deals, and some financial institutions reportedly have declined loaning requests from those on the blacklist.

The statement said that a total of 1,045 people and companies on the list had chosen to fulfil court orders after the database was put online.

"A mature and fair social credit system is the most effective mechanism to solve troubles in judgment implementation," said Xiao Jianguo, professor with Renmin University of China.

The database, which is available on the SPC's official website, followed a regulation which took effect on Oct. 1 stating that those who are capable of fulfilling court judgments but who fail to do so will be punished in accordance with the law.

Previously, the SPC said that courts at all levels will be permitted to release similar lists within their jurisdictions via newspapers, radio, television, the Internet and news conferences to impose more pressure on defaulters.