At the recent 36th session of the 12th Standing Committee of the National People's Congress, the Beijing Municipal government submitted the "Beijing Information Promotion Rule (Draft)" for approval.

This is the city's first piece of legislation regarding e-commerce and it is said to pose a strict requirement for e-commerce service providers. The draft regulation stipulates that firms and individuals must apply for a business license and undergo the relevant registry procedures before they can be engaged in e-commerce activities in the Beijing area. Firms must also must publicize their basic information and service rules on the homepage of their website.

In addition, e-commerce service providers shall verify the identity and other necessary information of companies and individuals that carry out business on their websites and preserve relevant data for authorities' inspections and audits.

"Everyone must abide by the laws, even in cyberspace," said Chen Jianping, deputy director of the Special Trading Division of Beijing Municipal Administration of Industry and Commerce, "So they must obtain a business license for their trading activities."

According to the new regulation, e-commerce service providers will face severe punishment such as forfeiture of IP addresses or confiscation of hardware if they are involved in any illegal online business.

BMAIC has already started an e-commerce monitoring system that reportedly automatically searches and monitors e-commerce websites run by businesses in China's capital city.