Recently, four departments including the Supreme People's Court ("SPC") have jointly issued the Opinions on Several Issues Concerning the Handling of Criminal Cases Involving Illegal Lending (the "Opinions"), with effect from October 21, 2019.
The Opinions state that any person regularly offering for-profit loans to non-specific borrowers among the general public, without approval of the regulator or beyond the prescribed business scope, which violates the state provisions and disrupts the order of the financial market, will be convicted of the crime of illegal business operations, according to the provisions of Subparagraph 4 of Article 225 of the Criminal Law, if the circumstance is considered serious. The Opinions further clarify that "regularly offering loans to non-specific borrowers among the general public" means lending money for over 10 times within two years, in the name of borrowing or otherwise, to multiple persons (including entities and individuals). In addition, the Opinions state that the conviction and sentencing will be based on those illegal lending, for which the actual annual interest rate on each borrowing exceeds the threshold 36%, and give consideration to some other factors, including the amount of illegal lending and the amount of illegal gains; and stipulate in detail the respective criteria of identifying a "serious circumstance" and an "extremely serious circumstance".