Chinese Compliance Guide
China’s anti-corruption provisions are largely contained in the Anti-Unfair Competition Law and the Criminal Law. The former prohibits unfair conduct in commercial settings, while the latter criminalizes bribery in the public sector, extortion and money laundering. The Criminal Law also prohibits bribery of foreign officials, bringing China’s anti-corruption legislation in line with other strict anti-corruption legislation.
China has stepped up enforcement of its anti-corruption regulations, highlighted by high-profile investigations into large Western companies. The Anti-Unfair Competition Law addresses commercial law (bribing the private representative of an organization), while the Criminal Law addresses both official bribery (bribing a public official) and commercial bribery.
Many Chinese companies are state-owned enterprises (SOEs), raising the risk of official bribery – a criminal offense under the Chinese Criminal Code – and establishing the ‘foreign official’ element under the FCPA. Compliance officers should consider a number of precautions, including:
Training
Management and employees should be taught about Chinese anti-corruption laws and other applicable foreign laws, including the FCPA and Bribery Act, as part of their ongoing compliance training.
Communication
Company policies should be communicated to all employees and third parties. (e.g., code of conduct, anti-corruption policy and the gifts and hospitality policy.)
Due Diligence
Perform due diligence on partners and suppliers, and enhance reviews of politically connected persons and customers.