luwei (fujian) salt industry import and export co., ltd
TRANSCRIPT
Copyright 2015 by Stanford University
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
http://cgc.law.stanford.edu/guiding-cases/guiding-case-5.
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
http://www.chinacourt.org/article/detail/2012/04/id/478572.shtml. 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 http://tjjnfy.chinacourt.org/article/detail/2014/05/id/1298622.shtml.
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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 China2
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 http://www.gov.cn/flfg/2005-
06/27/content_9899.htm. 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 http://www.npc.gov.cn/wxzl/gongbao/2000-12/05/content_5004656.htm and
http://www.npc.gov.cn/npc/xinwen/2009-08/27/content_1538233.htm. 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,
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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 http://www.spp.gov.cn/sscx/201502/t20150217_91466.shtml. A full text version of the
Administrative Litigation Law of the People's Republic of China as first passed is available at
http://www.gov.cn/flfg/2006-10/29/content_1499268.htm (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
http://www.gov.cn/xinwen/2015-03/18/content_2835648.htm. A full text version of the Legislation Law of the
People's Republic of China as first passed is available at http://www.gov.cn/test/2005-08/13/content_22423.htm
(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 http://www.changshu.gov.cn/zgcs/Zfxxgk/showinfo.aspx?infoid=2609f4d3-ecfd-4535-a8ef-
5f38ff2b1608&categoryNum=001002002003 and http://www.js.gov.cn/jsgov/tj/bgt/201311/t20131104405412.html. 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 http://www.suzhou.gov.cn/asite/show.asp?ID=7300
(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.”)
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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 Regulation8 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 http://www.mofcom.gov.cn/article/swfg/swfgbh/201101/20110107350882.shtml. 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
http://www.saic.gov.cn/zcfg/xzfggfxwj/199003/t19900302_45936.html.
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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 121.7 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. 0027 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.
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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, 1997. 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.