The most recent FCPA and anticorruption enforcement developments involving the People’s Republic of China (PRC) are summarized below. Thanks as always to Squire Sanders’ Shanghai Office for monitoring these enforcement actions.
1. New law or regulation
(1) The Interpretation on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases on Offering Bribes.
On December 26, 2012, the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the Interpretation on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases on Offering Bribes (“Interpretation”), which took effect on January 1, 2013.
The Interpretation applies principally to Article 390 of the Criminal Law of the People’s Republic of China, clarifying the conviction and sentencing standards for crimes involving the offering of bribes, and offering more precise definitions of certain terms in the Criminal Law such as “serious circumstances”, “great damage to state interests”, and “extremely serious circumstances”.
The Interpretation also clarifies that, with certain exceptions, the sanctions against a corporate briber-giver may be mitigated or waived if the company “voluntarily confesses” its bribe-giving conduct. Such treatment, however, is not applicable in certain circumstances, such as when bribes have been offered to more than three persons, or when the bribery results in “serious harmful consequences”.
(2) The Interpretation I on Several Issues Concerning the Application of Law in the Trial of Criminal Cases on Dereliction of Duty.
On January 8, 2013, the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the Interpretation I on Several Issues Concerning the Application of Law in the Trial of Criminal Cases on Dereliction of Duty (“Interpretation”), which took effect on January 9, 2013.
The Interpretation is reportedly intended to encourage government officials to fulfill their duties more diligently. According to the Interpretation, a state functionary who commits the crimes of dereliction of duty and taking a bribe must be punished for both. The subjects for the crime of dereliction of duty may also include staff members of companies, enterprises, and public institutions that are entrusted to exercise state administrative power in accordance with PRC laws.
Local level (Beijing & Shanghai): No developments.
Communist Party Rules: No developments.
2. Upcoming law or regulation
3. Government actions
(1) On January 4, Duan Zhenhao (“Duan”), the former Director of the Key Laboratory of the Earth’s Deep Interior under the Chinese Academy of Sciences, was reportedly sentenced to 13 years for embezzlement.
In 2011, Duan was accused by his estranged wife of misusing research funds to support several mistresses and an illegitimate daughter. Duan was also found guilty of claiming reimbursements from the academy with forged receipts amounting more than RMB 1.47 million (USD 236,368). Duan was nominated as a candidate for the Chinese Academy of Sciences before the scandal was revealed.
(2) On January 9, 2013, Lin Jianliang (“Lin”), the former Deputy Director of the Agricultural Bureau of Zhongshan City, Guangdong Province was sentenced to six and a half years in prison with confiscation of personal assets worth RMB 200,000 (USD 32,159) by Zhongshan City No. 2 Intermediate People’s Court for taking bribes.
During Lin’s term as Deputy Director from 2001 to 2011, he received bribes on several occasions, totaling RMB 941,000 (USD 151,308) and HKD 6,000 (USD 773). In return, Lin helped 16 enterprises, such as grain and oil companies, apply for agricultural funding through abuse of his power.
(3) On January 18, 2013, Yang Chunmei (“Yang”), the former Manager of the Huairou Service Company, a state-owned enterprise, was sentenced to life imprisonment by the Beijing Municipality No.2 Intermediate People’s Court for corruption and embezzlement.
Yang was accused by several former employees after her retirement and was found guilty of illegally obtaining public property worth RMB 12.24 million (USD 1.96 million) during the restructuring process of the Chunguang Mall affiliated with the state-owned enterprise in 2001. During Yang’s term, Yang allegedly used her position to obtain the use right of a parcel of state-owned land with 8271.21 square meters valued at RMB 7.07 million (USD 1.13 million) and transferred such land use right to a company ultimately controlled by herself for free.
(4) On January 20, 2013, Ye Mou (“Ye”), the former Director of the Land and Resources Bureau of Xingzi County, Jiujiang City, Jiangxi Province, was sentenced to twelve and a half years in prison with confiscation of personal assets worth RMB 150, 000 (USD 24,119) by Jiujiang City Xunyang District People’s Court for taking bribes.
Ye allegedly abused his position during his term in the Land and Resources Bureau of Xingzi County to obtain public funds in the amount of RMB 134,490 (USD21, 625) from 2003 to 2008. He was also found guilty of receiving bribes on sixty-eight occasions from twenty persons, aggregating to RMB 922,770 (USD148, 376) by abusing his position as the Director of the Land and Resources Bureau of Xingzi County and the Director of the Land and Resources Bureau Land Reserve Centre of Jiujiang City from 2004 to 2011. In return, Ye helped the bribing individuals seek benefits in land auction projects, real estate development, and construction contracts.
The General Secretary of the Communist Party of China (“CPC”) Central Committee and the Chairman of the Central Military Commission, Xi Jinping has vowed to fight against corruption and “keep power reined within the cage of regulations” at the Second Plenary Session of CPC’s Central Commission for Discipline Inspection (“CCDI”) on January 22, 2013.
General Secretary Xi stressed that the fight is a long-term, complicated, and arduous task and that CPC should crack down on both “tigers” and “flies” at the same time by investigating and punishing officials who conduct illegal activities. “No exception shall be made when it comes to Party disciplines and laws,” Xi said.
5. China-related FCPA action