A court order against a Mainland company can stop its legal representative boarding a plane.
Three common court records distinguish enforcement, dishonesty and consumption restrictions. Read the company’s record and any consequences for the people who run it.
By Matthew Lee
Six grounds put a judgment debtor on the Supreme People's Court's dishonest list. Nine kinds of spending are barred once a court issues a restriction order.
Mainland courts publish enforcement records on the China Enforcement Information Disclosure Network (中国执行信息公开网, zxgk.court.gov.cn), relaunched by the Supreme People's Court in June 2018. Anyone can search it by name.
Three common records on the network
It carries judgment debtors in open cases, the dishonest list, the consumption restriction list, cases where enforcement was terminated for now (终本案件), and enforcement documents.
| Record | Who is on it | What follows |
|---|---|---|
| Judgment debtor (被执行人) | A party against whom a judgment is being enforced | Court, filing date, case number, amount and status are public |
| Dishonest judgment debtor (失信被执行人) | A judgment debtor who has not performed and meets one of six grounds | Credit discipline across government and finance; consumption restriction is mandatory |
| Consumption restriction (限制消费, often called 限制高消费) | A judgment debtor who did not pay on time | A bar on high spending, reaching a company's legal representative |
Judgment debtor
A judgment debtor record means a court is enforcing an obligation against the company. It does not by itself mean the company refused.
Dishonest judgment debtor
The Provisions on Publishing the List of Dishonest Judgment Debtors were adopted in 2013 and amended in 2017. Under Article 1, a court must list a judgment debtor that has not performed and that:
- Has the ability to perform and refuses.
- Obstructs or resists enforcement with forged evidence, violence or threats.
- Evades enforcement through sham litigation, sham arbitration, or hiding or transferring assets.
- Breaches the asset reporting rules.
- Breaches a consumption restriction order.
- Refuses without good reason to perform an enforcement settlement.
Grounds two to six carry a listing term of two years, extendable by one to three years for serious obstruction or several acts of bad faith. The first ground has no fixed term; the court deletes the entry within three working days once the debt is paid or the case ends in one of the ways Article 10 lists. Minors are never listed.
For a company, Article 6 publishes its name, its Unified Social Credit Code and the name of its legal representative or person in charge, with the obligation, the specific conduct, the case number and the court.
Article 8 sends the list to government departments, financial regulators, financial institutions and credit reporting agencies, for use in procurement, tendering, approvals, financing and credit, market access and qualifications. Under Article 178 of the Company Law, a person listed for a large unpaid debt may not be a director, supervisor or senior manager.
Consumption restriction
The Provisions on Restricting High Consumption and Related Consumption of Judgment Debtors date from 2010 and were amended with effect from 22 July 2015. A court may restrict a judgment debtor that has not paid within the period in the enforcement notice. It must restrict every dishonest judgment debtor.
Under Article 3, a restricted individual may not:
- Travel high: fly; take soft sleepers or second class or above on ships; take any seat on G-series trains, or first class or above on other bullet trains.
- Spend high: at star-rated hotels, nightclubs or golf courses.
- Buy or build: buy real estate, build, extend or expensively renovate a home, or buy a vehicle not needed for business.
- Rent high: lease high-end offices, hotels or apartments to work from.
- Live high: holidays, high-fee private schools for children, or high-premium insurance wealth products.
When the debtor is a company, the company and its legal representative, main person in charge, the person directly responsible for affecting performance, and its actual controller may not do these things. Private spending from personal funds can be approved on application. The court lifts the order on full performance, and may lift it on adequate security or with the creditor's consent.
What each means for a counterparty review
- A judgment debtor record: ask about the case, the amount and whether it is settled.
- A dishonest listing: a court has found one of the six grounds, such as refusal or evasion. The company will meet limits on bank financing and public tenders.
- A restriction order: a court-ordered payment is overdue, and the people who run the company are personally restricted.
- The people as well as the company: search the legal representative and the controller by name. They may be listed through another company.
Entries are deleted when debts are paid, so a clean result is true on the day of the search. Re-checks belong in monitoring.
How Fill Easy fits in
China Cross-Border Data returns Mainland risk records, including court and litigation, enforcement and regulatory blacklists, with the Supreme People's Court among its sources. Our background and watchlist checks cover a Mainland person or company, one report per subject, and a Mainland company search summary states the result in English, for example "Not listed as a dishonest debtor." Personal information reaches Hong Kong under our filed Standard Contract (Filing No. 202500031). Send the Chinese name or credit code to agent@fill-easy.com. Mainland China KYC and AML sets out what Hong Kong regulators expect of the file.
When did your team last search the legal representative of your largest Mainland counterparty, and not only the company?