[author: Kent Woo]*
1. Is your country a member of the OECD Anti-Bribery Convention?
2. Is your country a member of any other bilateral or multilateral conventions on anti-corruption?
Yes. China is a member of the United Nations Convention against Corruption and the Financial Action Task Force.
3. Are there local anti-corruption laws in your country focusing on corporations, not individuals? If yes, what sanctions can be imposed?
Both individuals and corporations are subject to anti-corruption laws in China. The sanctions include administrative penalties and criminal punishments. For individuals, sanctions range from monetary fines to imprisonment/criminal detention. For corporations, sanctions include monetary fines against the corporation, imprisonment/criminal detention, and/or monetary fines against the persons in charge.
4. Can companies be held liable for acts of corruption under civil or administrative law?
Yes. The Anti-Unfair Competition Law establishes administrative penalties for business operators committing private bribery in circumstances where the violations have not constituted criminal offenses. Special regulated sectors such as banking and insurance may be punished for corruption by the corresponding regulators.
5. Is corruption of individuals punishable?
Yes. See the answer to Question 3.
6. Are facilitation payments allowed?
7. Is there a legal regulation/maximum limit for accepting or giving gifts, invitations, etc.?
8. Are bribes to foreign government officials prohibited?
Yes. According to Article 164 of the Criminal Law, people who give property to foreign government officials or an official of an international public organization for improper commercial benefit shall be punished.
9. Does your legislation have any extraterritorial reach?
Yes, Chinese legislation has extraterritorial reach under specific circumstances. Criminal Law applies to (i) natural persons located in China, regardless of nationality, (ii) Chinese nationals who commit crimes outside the territory of China, unless the maximum punishment for such crime is a fixed-term imprisonment of not more than three years, and (iii) foreign nationals who commit crimes outside China against China or its citizens, where the crime carries a minimum punishment of fixed-term imprisonment of not less than three years and the act is deemed a crime in the place where it is committed.
10. Is it possible to confiscate assets from the company?
Yes, the illegal income of a company may be confiscated under specific circumstances. For example, if a company bribes another person in violation of Article 7 of the Anti-Unfair Competition Law, then the relevant authority shall confiscate its illegal income.
11. Does your legislation rely on deferred prosecution or non-prosecution agreements or any other type of non-trial resolution for corruption?
12. Can a company be liable for the acts of its intermediaries or third parties?
Yes. Paying, receiving, or soliciting bribes through an intermediary or a third party would not exempt the party who pays, receives, or solicits the bribes from criminal liability.
13. Can a parent company be liable for the acts of its subsidiaries?
Yes, if the acts of the subsidiary can be connected to the parent (see the answer to Question 12).
14. Are there any affirmative defenses or exceptions for those accused of corruption acts?
15. Does your jurisdiction require domestic entities to implement anti-corruption internal programs?
Having a compliance program is not a mandatory requirement for companies and does not constitute an affirmative defense for legal entities. Many companies, however, have anti-corruption internal programs. Corresponding regulators require special regulated sectors such as banking and insurance to formulate internal anti-corruption rules.
16. Is having a compliance program a defense or mitigating factor, while reviewing sanctions?
Yes. There are case reports where the existence and proper implementation of a compliance program helped the company to mitigate or be excluded from liabilities.
17. Could the cooperation with the authorities or an internal investigation be a defense or mitigating factor?
Yes. However, it must reach a certain standard and be subject to the court’s discretion.
18. Is there any publicly available guideline issued by the authorities in charge of enforcing anti-corruption laws? For example, manuals on compliance programs, leniency agreements, etc. If so, please provide the link.
There is no guidance at the national level, but some local authorities may have their own guidance. For example, the Administration of Market Regulation of Putuo District, Shanghai, has published Guidance on Compliance Management for Preventing Commercial Bribery Actions by Business Operators (in Chinese: 经营者防范商业贿赂行为合规管理指引) (link: http://www.shpt.gov.cn/scjgj/qitwj-zhzwzfwj2021/20211118/818061.html) in 2021. Companies can make inquiries with local authorities regarding the availability of local guidance.
*Zhong Lun Law Firm