Introduction to China's Approach to Anti-Corruption

Chinese anti-corruption laws are scattered across a variety of sources, but two statutes constitute the primary legislation – People’s Republic of China Criminal Law and the Anti-Unfair Competition Law of the People’s Republic of China (AUCL).

The AUCL prohibits unfair competition acts which include intellectual property, antitrust and anti-bribery. The anti-bribery provisions prohibit bribery “by offering money or goods or by any other means, in selling or purchasing commodities.” Government officials are prohibited from “abusing administrative powers” by restricting the purchase of commodities from specific businesses designated by them or restricting the flow of goods to market. The provisions also call for accurate accounting of business transactions.

Businesses found to violate the provisions may face fines ranging from 10,000 to 200,000 yuan, imprisonment and confiscation of the illegal earnings. Government officials who violate the law could be sanctioned by the relevant department, fined one to three times the illegal earnings, and have the illegal earnings confiscated.

People’s Republic of China Criminal Law prohibits commercial bribery, corruption of public officials and their relatives as well as bribery overseas. All individuals convicted of engaging in corruption and bribery offenses, both the bribe-givers and bribe-receivers, shall be fined and can face up to 10 years in prison. For acts involving the bribery of Chinese officials, however, the bribe-giver can face up to life imprisonment and Chinese officials accepting bribes totaling 3 million yuan can be sentenced to death. This harsh sentence should be of substantial concern to executives and other individuals operating in China.

Compliance Made Easy

Hiperos 3PM ABAC Accelerator helps companies simplify and streamline compliance with China’s anti-bribery laws by centralizing third party information and workflows, automating and documenting due diligence, assessment and scoring of third parties, managing only third parties posing corruption risks and monitoring risk factors continuously with data directly from leading data providers. All material ABAC issues and actions taken are recorded in a central “book of record” with a verifiable audit trail. Learn more