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Tuesday
Sep012015

China amends its Criminal Law: Impact on anti-bribery enforcement

On August 29, China’s National People’s Congress (NPC) adopted a slate of amendments to the country's Criminal Law. 

Draft amendments to the Criminal Law were previously released for public comment on November 3, 2014 (see our e-alert here). As expected, the NPC did not make significant changes to the draft amendments.

In the anti-corruption area, the amendments --

(1) add the crime of providing bribes to state functionaries’ close relatives or other persons closely related to them,

(2) add monetary penalties in addition to other punishments for corruption-related crimes,

(3) raise the bar for bribe-givers to be exempted from punishment, and

(4) replace specific monetary figures that trigger different levels of punishments with more general standards such as “relatively large,” “huge,” and “especially huge.”

The new amendments take effect November 1, 2015.

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Amendments related to corruption-related crimes:

1. Adding a new crime of offering bribes to close relatives of current and former state functionaries. 

The amendments add a crime (as Article 390(a)) of offering bribes to “state functionaries’ close relatives or other persons closely related to them, or former state functionaries, their close relatives, or other persons closely related to them” (近亲属或者其他与该国家工作人员关系密切的人).

In 2009, the Criminal Law was amended to expand the scope of bribe-recipients to include close relatives and individuals with close relationships with state functionaries and former state functionaries. The 2009 amendment, however, did not impose criminal punishments on bribe-givers in such circumstances.

The new amendments make it clear that giving bribes to close relatives or associates of state functionaries is punishable by imprisonment and fines -- although with shorter prison terms than the bribe recipients.

2. Adding monetary fines to various corruption/bribery-related crimes.  

Under the preexisting version of the Criminal Law, fines could be imposed for corrupt activities only on legal entities, with one exception: fines could be imposed on individual bribe-givers only when (i) bribing an employee of a company or enterprise, or to a foreign party performing official duties or an official of international public organizations; and (ii) the amount involved is “huge” (Art. 164). 

The new amendments impose monetary fines against all individuals that are convicted of engaging in corruption and bribery offenses (both bribe-givers and bribe-recipients), in addition to other punishments.  

3. Raising the bar for bribe-givers to be exempted from punishment. 

Article 390 of the preexisting Criminal Law provides that “[a]ny briber who, before he is investigated for criminal responsibility, voluntarily confesses his act of offering bribes may be given a mitigated punishment or exempted from punishment.” 

The amendments retain the voluntary confession requirement and add other requirements for exemption from punishment: “one whose crimes are relatively minor may be exempted from punishment or receive mitigated punishment, if by exposing corrupt activities of others he provided crucial information leading to the successful investigation of a major case, or he performed other major meritorious service.” 

4. Modification of sentencing standards for embezzlement convictions. 

Instead of sentencing based on the specific monetary amount embezzled under the current Criminal Law, the amendments impose prison sentences and monetary penalties based on more general criteria -- “relatively large,” “huge,” and “especially huge” -- that will result in three levels of punishment. 

*     *     *

A detailed table comparing the preexisting and new provisions in Chinese and English can be obtained from the authors.

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Eric Carlson, a contributing editor of the FCPA Blog, is a partner at Covington & Burling LLP. He specializes in anti-corruption compliance and internal investigations, with a particular focus on China and other regions of Asia. He speaks fluent Mandarin and Cantonese and can be contacted here.

Ping An is an associate at Covington’s Shanghai office specializing in anti-corruption compliance and internal investigations, with a particular focus on China and other regions of Asia. Ping An speaks native Mandarin and English and can be contacted here.