A Naperville, Illinois man admitted in federal court that he intentionally failed to disclose his prior membership in the Chinese Communist Party when seeking naturalized citizenship in the United States.
Entries in Communist Party (7)
Take as much time as you need to answer this question: When a civil servant is asked if he'd like to have an affair, or if she wants money or jewelry, could that be a red flag for graft?
A Chinese court Friday rejected the appeal of former party leader Bo Xilai and upheld his life sentence.
Suddenly there's lots of buzz about China's princelings -- the children of top officials who enjoy vast privileges in education, work, and business.
Another high-flying China official has been indicted for taking bribes.
With the 17th National Congress of the Chinese Communist Party in full swing in Beijing, we thought it would be a good time to see what leaders there are doing about corruption. Here's some of what we found.
Red tape is out. The CCP says that since 2002, 68 national government departments have rescinded or amended 1,806 of their 3,605 administrative approval items for new businesses. We're not always sure about China's statistics, but these sound positive. At the provincial level, too, times are changing. The Party says local governments have canceled more than half their regulations. It cites the Zhejiang government, which "slashed the number of required approvals for new businesses from 3,251 to 630 in five years, and Chongqing, which canceled 312 items last year alone."
One reformer from the Party said cleaning up the country's over-regulated administrative approval system -- making it simpler and more transparent for new businesses to get up and running -- is essential to cutting corruption. He cited the example of "a city government in Henan Province that established a 'steamed bread office,' which required the registration of every person in the city who wanted to make and sell steamed bread." He also reported the story of "a south China farmer who took two years to acquire the 270 official seals needed to establish a poultry farm, by which time he found the business was no longer viable."
Notwithstanding the steamed bread office in Henan Province, the World Bank says China is making steady progress. It reduced the time to register a new business from 48 days in 2005 to 35 days in 2006. And new online customs procedures reduced the time to import and export by two days.
That's good news, because red tape and corruption are always best friends. And China -- though trying to help its citizens and foreign investors -- still has a long way to go in both departments. For now, FCPA compliance there remains difficult, and the red tape means compliance red flags are always in sight.
View the "News of the Communist Party of China" Here.
View a Summary of the World Bank's Doing Business Report 2007 Here.
A friend of The FCPA Blog who bunked in Singapore awhile and has since returned to Washington, D.C. asks: In a communist country, is everyone a government official?
The question is important because the U.S. Foreign Corrupt Practices Act prohibits corrupt payments to "foreign officials" for the purpose of obtaining or retaining work or gaining any unfair advantage. If, as our questioner suspects, everyone in a communist country is a foreign official, then compliance risks multiply. In China, for example, there will be 1.3 billion chances to violate the FCPA every day.
Duly frightened, we believe the prudent approach in a communist state or any country where the government dominates the economy is to consider everyone a foreign official, until proven otherwise. There are no cases or FCPA Opinion Procedure Releases we know of that answer the question definitively. But foreign officials for the FCPA include officers, employees or representatives of any government, at any level. They also include officials of foreign political parties.
In the communist states we're familiar with, especially the really Big One, most people work for government-owned or controlled enterprises -- hospitals, shipyards, oil companies, airlines, banks, insurance companies, media firms, sports teams, real estate developers, investment funds, the 2008 Olympics Committee, you name it. Even when ultimate ownership is obscure, which can be the case with listed companies, control may still rest with the government or its alter ego, the Chinese Communist Party. The CCP appoints only its own members to be directors of state-owned enterprises. And any CCP member important enough to nab a directorship at a state-owned enterprise or international joint venture probably holds some kind of party title and should therefore be deemed an "official of a foreign political party" for the FCPA.
Some practitioners are also guided by local laws. Using again the example of China, the legal definition of a "public official" in a number of statutes and regulations is broad and apparently covers all Chinese Communist Party members. The U.S. Department of Justice has said in another context that it is not bound by local statutory definitions or legal opinions. But for this question, the DOJ is unlikely to interpret "public officials" much different than the host country does. Mark Mendelsohn, the Deputy Chief of the DOJ's Criminal Division, Fraud Section (the group that prosecutes FCPA cases), noted in 2006 that many companies now assume that everyone in China is a government official, because "Chinese regulators are involved in any business enterprise." He warned against an FCPA defense based on claims that "you thought you were paying a kickback to a private individual." (SEC Today, Volume 2006-57, Friday, March 24, 2006).
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