On December 7, 2021, the China State Administration for Market Regulation ("SAMR") drafted the Measures for the Identification of Illegal Gains in Cases of Administrative Penalties Imposed by Market Regulatory Authorities (Draft for Comment) (the "Draft for Comment") for public comments by January 5, 2022.

The Draft for Comment mainly clarifies the following: (1) the relevant definitions of illegal gains and basic methods of calculating illegal gains; (2) the deduction circumstances in calculating illegal gains; and (3) how to cope with situations where it is difficult to accurately calculate illegal gains. Among them, the Draft for Comment takes into account the protection of the rights of the parties concerned and the needs of law enforcement practice, by enumerating in Article 5 the necessary expenses for deduction and specifying the burden of proof for the parties concerned. Considering the severity of the violation and the degree of harm, Article 6 provides for exceptions where the deduction is not allowed, while Articles 7 and 8 clarify the principle of tax and fee deduction and the calculation of the amount of compensation that the parties have already refunded in accordance with the law.

(Source: China State Administration for Market Regulation)