They have a system largely for penalizing corporations and businesses that are caught skirting regulations
The core mechanism is the court “judgment defaulter” blacklist (失信被执行人) and related high-consumption restrictions (限制高消费), which are imposed when someone refuses to comply with a legally effective court judgment, such as paying a debt or damages ordered by the court. The penalty mainly restricts luxury or non-essential spending (flights, first-class train seats, luxury hotels, tourism, etc.) until the judgment is fulfilled. In law it applies to any individual or company, and if a company is the debtor the restrictions can extend to its legal representative or responsible managers on top of any accounts registered to the company. In practice 99.99% of cases involve businesses because most court enforcement actions arise from commercial disputes (contracts, loans, wages, suppliers, etc.), so the mechanism ends up being an enforcement mechanism against business owners and managers to push them to settle judgments properly, but legally it’s just a court enforcement tool against anyone who refuses to comply with a court ruling.
It’s applied to bank accounts. If you owe a debt ordered by the court (99.99% businesses) you can’t use your business accounts to buy luxuries, it is often also applied to the individual owner/management of the company as well so they can neither use personal or business accounts to live a life of luxury while owing debts to people.
The core mechanism is the court “judgment defaulter” blacklist (失信被执行人) and related high-consumption restrictions (限制高消费), which are imposed when someone refuses to comply with a legally effective court judgment, such as paying a debt or damages ordered by the court. The penalty mainly restricts luxury or non-essential spending (flights, first-class train seats, luxury hotels, tourism, etc.) until the judgment is fulfilled. In law it applies to any individual or company, and if a company is the debtor the restrictions can extend to its legal representative or responsible managers on top of any accounts registered to the company. In practice 99.99% of cases involve businesses because most court enforcement actions arise from commercial disputes (contracts, loans, wages, suppliers, etc.), so the mechanism ends up being an enforcement mechanism against business owners and managers to push them to settle judgments properly, but legally it’s just a court enforcement tool against anyone who refuses to comply with a court ruling.
Ah, gotcha, thanks for the clarification!
How do you make businesses (i.e. the corporations) unable to access luxury? Sounds like an individual-level policy being applied to the organization.
It’s applied to bank accounts. If you owe a debt ordered by the court (99.99% businesses) you can’t use your business accounts to buy luxuries, it is often also applied to the individual owner/management of the company as well so they can neither use personal or business accounts to live a life of luxury while owing debts to people.