Chinese Anti-Corruption Laws

China's anti-corruption provisions are largely contained in the Anti-Unfair Competition Law of the PRC and the Criminal Law of the PRC. China has long held a tradition of gift-giving, known as Guan Xi, in all types of business transactions. The country has embarked on an aggressive anti-corruption campaign, and strong enforcement is likely to continue in the coming years.

The Anti-Unfair Competition Law of the PRC

The Anti-Unfair Competition Law prohibits, inter alia, commercial bribery punishable by economic and administrative sanctions. Serious offenses may be subject to a criminal investigation. Prohibited acts of commercial bribery include giving bribes for the purpose of selling or purchasing goods and receiving bribes in the course of selling or purchasing. Fines range from RMB 100,000 to twice the amount of the fine and illicit income is confiscated.

The Criminal Law of the PRC

The Criminal Law prohibits giving and receiving money or property – including cash, items, and proprietary interests – to obtain an undue benefit. Proprietary interests have been extended to cover material interests such as the provision of housing renovation, the release of debt or other benefits such as membership services or travel. Bribery is distinguished by ‘official bribery’ (‘working personnel of the State’) and ‘non-official bribery’ (‘personnel of state organizations not engaged in public services’ or ‘working personnel of private companies’). Penalties for the offense of bribery include fines and the confiscation of property and imprisonment and the death penalty. Companies can be held liable for the bribery of state personnel or their close relatives. Commercial bribery is prosecuted if the bribes exceed RMB 60,000. Commercial bribery exceeding RMB 60,000 can result in imprisonment of not less than three years, while bribes above RMB 2 million can result in a prison sentence ranging from three to ten years.

Official Bribery Requirements

  • Involvement of ‘working personnel of the State’.
  • Value Threshold:
    • Individual: RMB 10,000 – more than RMB 5 million.
    • Company: RMB 200,000 or more.
  • Given in return for an improper benefit.

Non-Official Bribery Requirements

  • Involvement of ‘non-working personnel of the State’ or ‘working personnel of private companies’.
  • Value Threshold:
    • Company: RMB 60,000 – RMB 2 million or more.
  • Given in return for an improper benefit.

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