Anti-Bribery and Corruption: China
Despite the long held Chinese tradition of Guan Xi, China has embarked upon a sweeping anti-corruption campaign and one of the weapons used by the regulators is the imposition of tougher sanctions on offenders. It is imperative for business to keep abreast of the latest developments in this area to ensure that its anti-corruption and bribery procedures and policies are up to date.
What is the governing legislation
Chinese laws governing anti-corruption and bribery are contained primarily in the Anti-Unfair Competition Law of the PRC and the Criminal Law of the PRC.
The Supreme People’s Court and the Supreme People’s Procuratorate also issue interpretations from time to time. These interpretations serve as useful guidelines in the implementation of the laws. One of the most important interpretations to be issued is the Interpretation on Several Issues concerning the Application of Law in the Handling of Criminal Cases relating to Graft and Bribery effective as of 18 April 2016.
What are the offences
A distinction is drawn between official bribery and commercial bribery.
The offence of official bribery is committed when there is a giving, accepting, soliciting or introducing of a bribe to or by state officials of a government related entity. Minimum monetary limits are imposed on the offences. For the crime of giving a briber, it is RMB30,00 if both the offeror and recipient are individuals. If, however, the bribe is offered to three or more persons, unlawful gains are used for the bribe, bribes are offered to officials of certain government agencies, bribes are given to seek promotion or to judicial offers, if the bribe causes a loss in value of more than RMB500,000 and less than RMB1,000,000, a crime will be committed if the bribe is between RMB10,000 and RMB30,000. If an individual offers a bribe to a government related entity, the minimum monetary limit is RMB100,000. If an entity offers a bribe, a crime is committed if the value of the bribe is at least RMB200,000, regardless of whether the recipient is an individual or entity. An individual recipient of a bribe commits an offence if the value of the bribe is at least RMB30,000; if a government related entity commits an offence if it receives a bribe of at least RMB100,000. The act of introducing an individual or entity to give a bribe is also an offence if the bribe is at least RMB20,000 or RMB200,000 respectively.
Commercial bribery refers to the giving and accepting a bribe by non-state officials/ government related entities. The threshold for prosecuting an offence of giving a bribe is RMB60,000 if the offender is an individual, and RMB200,000 if the offender is an entity. The prosecution threshold for accepting a bribe is RMB60,000 for both individuals and entities.
The Anti-Unfair Competition Law defines commercial bribery as the use by business operators of money, assets, or other means, to bribe counter parties to sell or purchase goods. This includes kickbacks provided off the books. Unlike the Criminal Law which imposes monetary limits for prosecution, there are no monetary limits imposed under the Anti-Unfair Competition Law.
What are the defences/mitigating factors
The usual defence is that the relevant property is offered or accepted with legitimate basis, or if no illegal benefit is received.
What are the sanctions
Under the Criminal Law, the sanctions for crimes of official bribery are:
• sanctions for accepting a bribe range from criminal detention of not more than three years imprisonment to life imprisonment or the death penalty;
• sanctions for the crime of giving a bribe range from criminal detention of not more than five years imprisonment of not more than fifteen years imprisonment or life imprisonment;
• sanctions for introducing a bribe range from criminal detention to not more than three years imprisonment.
The sanctions for the crime of commercial bribery are as follows:
• sanctions for accepting a bribe by a non-state functionary range from criminal detention of not more than five years imprisonment to a maximum of fifteen years imprisonment.
• sanctions for giving a bribe to a non-state functionary range from criminal detention of not more than three years imprisonment to not more than ten years imprisonment.
In addition, there is prosecutorial discretion to confiscate the offender’s assets and illegal proceeds. In addition, Amendment (IX) to the PRC Criminal Law, which took effect in November 2015, imposes a fine in respect of each of the above-mentioned crimes except for the crime of accepting a bribe by non-state functionary.
Under the Anti-unfair Competition Law, administrative penalties for commercial bribery may be imposed which include a fine ranging from RMB10,000 to RMB200,000, as well as disgorgement of illegal income generated from the commercial bribery.