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FCPA Blog Daily News

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Thursday
Mar102011

Letter From Beijing

Lawyer Eric Carlson introduces China's FCPAIn late February, the PRC legislature passed 49 amendments to the Criminal Law, one of which criminalizes paying bribes to non-PRC government officials and to officials of international public organizations. It's the first time PRC law has prohibited Chinese nationals and PRC companies from paying bribes to non-PRC government officials. 

The new law will take effect on May 1.

It's short:

Whoever, for the purpose of seeking illegitimate commercial benefit, gives property to any foreign public official or official of an international public organization, shall be punished in accordance with the provisions of the preceding paragraph [i.e., a pre-existing domestic bribery law].

Here's a quick look at how China's new law compares to the FCPA: 

Jurisdiction

FCPA: “issuers,” “domestic concerns,” or some US territorial nexus

 

PRC law: PRC citizens, companies organized under PRC law (including domestic companies, JVs, representative offices, and wholly foreign-owned enterprises), or some PRC territorial nexus

 

Intent Requirement

 

FCPA: corrupt offer/transfer directly or indirectly to obtain/retain/direct business or obtain improper advantage

 

PRC law: “seek illegitimate commercial benefit” (not defined, but similar language has been interpreted elsewhere to mean seeking some benefit in breach of laws, regulations, or rules, or providing assistance or facilitation in breach of laws, regulations, rules, or industry code)

 

Thing of Value

 

FCPA: “anything of value”

 

PRC law: “property” (not defined, but most likely interpretation, based on comparable definitions elsewhere, is tangible items of monetizable value)

 

Covered Recipients

 

FCPA: “foreign official,” “foreign political party or official thereof,” “candidate for foreign political office” (terms are defined broadly and have been interpreted by regulators even more broadly)

 

PRC Law: “foreign public official” or “official of an international organization” (not defined, but may follow definition in the UN Convention Against Corruption, Article 2)

 

Exceptions and Affirmative Defenses

 

FCPA: facilitating payments, lawful under written local laws, certain product promotion or contract execution expenses

 

PRC law: none

 

Accounting Requirements

 

FCPA: books & records provisions, internal control provisions

 

PRC law: not explicitly part of the new law, but punishable under other existing laws

 

Penalties

 

FCPA: civil and criminal

 

PRC law: criminal

 

_________________

 

Eric Carlson is a Beijing-based attorney at Covington & Burling LLP. He specializes in anti-corruption compliance, with a particular focus on China and other regions of Asia. He speaks Mandarin and Cantonese. He can be contacted here.

A fuller description of the new China law provisions can be found here.

Reader Comments (1)

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April 1, 2011 | Unregistered Commenterinternational law

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