After raiding Mintz’s Beijing office, China fines the firm $1.5 million for ‘unapproved’ activities

China has fined US firm Mintz Group $1.5 million for conducting “unapproved statistical work” after a raid on its Beijing office raised concerns about China’s openness to foreign investment, according to a statement from the Beijing Municipal Bureau of Statistics.

According to a July 5 ruling by Beijing’s statistics bureau, originally published by the Wall Street Journal, the firm conducted “foreign-related statistical research” without seeking and obtaining licenses.

Mintz conducted 37 such investigations between March 2019 and July 2022, according to a July 14 notice on the bureau’s website.

As punishment, the bureau confiscated 5.34 million yuan of the firm’s “illegal proceeds” and charged an administrative penalty of the same amount, for a total fine of around $1.5 million. 

Mintz has 60 days in which to file an appeal and six months in which to pursue an administrative issue. 

It did not react to a comment request. The company has previously stated that it is licensed to conduct legitimate business in China and has always functioned legally. 

According to Mintz’s website, its services include doing background checks on possible business partners and new recruits, gathering facts for litigation suits, and conducting internal investigations.

In March, Chinese authorities raided Mintz’s Beijing office and imprisoned all five local employees, signifying the start of a sweeping assault on consulting and due diligence firms, including Bain & Company’s Shanghai branch and Capvision Partners.

Foreign business lobbying groups have claimed that the crackdown is undermining investor trust in the world’s second-largest economy.

Even as China reopens its doors to the rest of the world this year after removing pandemic measures that virtually closed its borders, it has grown wary of its engagement with the West, in accordance with President Xi Jinping’s desire to prioritize national security over everything else.

In July, Beijing revised its anti-espionage law, broadening the definition of spying and prohibiting the transmission of material related to national security. 

In recent years, China has updated a slew of rules to limit international access to its data, such as requiring data to be stored on Chinese servers and requiring companies holding user data to go through a security review before listing shares on foreign exchanges.