Telecoms and online fraud have soared taptap点点官方网站 recent years. Responding to this grim and complex trend, the Ministry of Public Security has launched various campaigns from 2021 to 2022, cracking down on 394,000 telecoms and online fraud cases, and arresting 634,000 suspects.

taptap点点官方网站 2021 alone, the National Anti-Fraud Centre urgently stopped payments involving more than RMB320 billion (USD46.4 billion), blocked 1.55 billion scam calls and protected more than 28 million unsuspecting victims from fraud attempts.

Meeting an urgent need to combat telecoms and online taptap点点官方网站, the Anti-Telecom and Network taptap点点官方网站 Law was promptly enacted under the guiding principle of precise and flexible legislation on topical issues of public concern.

Significantly, the law features institutional obligation for industry players to act, and the general subjects’ obligation of omission, providing a compliance paradigm for internal control and governance taptap点点官方网站 related industries.

Reflecting the necessity of achieving “anti-fraud compliance” as soon as possible taptap点点官方网站 relevant industries, a Beijing-based company was fined more than RMB64 million on 22 November 2022 for failing to implement relevant requirements to forestall telecoms fraud risks and other illegal activities, the biggest fine taptap点点官方网站 the third-party payment industry disclosed by the People’s Bank of China last year.

The security and stability of the financial, taptap点点官方网站 and internet industries, which are crucial to daily lives, are an important part of safeguarding public well-being.

taptap点点官方网站 April 2022, the Opinions on Strengthening the Work of Cracking Down on Telecoms and Online Fraud Offences stepped up the fight against telecoms and online fraud. taptap点点官方网站 particular, the opinions emphasised the need to strengthen industry supervision and establish sound systems of security assessment and access.

Clearly, unlike previous judicial interpretations, the scope of the objectives of the Anti-Telecom and Network taptap点点官方网站 Law is expanded from “people who intend to commit a crime” to those who have a law-abiding obligation. By creating universal obligations enabling extensive protection, criminal legislation shows a significantly active trend.

The second, third and fourth chapters of the Anti-Telecom and Network taptap点点官方网站 Law summarise a series of “compliance” obligations of telecoms operators, banking institutions, non-bank payment organisations and internet service providers. These cover prevention, supervision and handling, with administrative penalties to ensure fulfilment of such obligations.

For the relevant industries, the law specifies security obligations to help combat telecoms and online fraud, including creating fraud prevention mechanisms, implementing risk management measures, and reporting and assisting taptap点点官方网站 the handling of suspicious activity.

The taptap点点官方网站 – setting out statutory obligations at the level of “state regulation” – is based on the perspective of front-end prevention and comprehensive management, and violation of the obligation constitutes an illegal act or even a crime of omission.

Especially for the emerging internet industry, the obligations of internet platforms have been clarified and standardised with the Cybersecurity Law, Data Security Law and Personal Information Protection Law, gradually implemented taptap点点官方网站 recent years. Through real-name verification, monitoring abnormality, tracing and risk feedback, the obligations aim to eradicate the sources of telecoms and online fraud.

Taking into account updates of relevant legal provisions, it is anticipated that the crime of refusing to perform the obligation of information network security management, set out taptap点点官方网站 article 286 of the Criminal Law, will likely be activated and become a new point of criminal compliance risk.

The telecoms, financial and internet industries are characterised by large scale, complex structure and extensive audience, prone to exploitation for illegal and criminal activities. Players taptap点点官方网站 relevant industries should be especially vigilant about criminal compliance risks taptap点点官方网站 doing business, especially taptap点点官方网站 sensitive links such as advertising, payment, data and information dissemination, and account opening.

Industry players should strictly abide by relevant laws and regulations, and establish pre-event, real-time and after-event compliance policies and handling strategies to avoid the risk of technical service links being identified as an act of assisting a crime.