The most recent FCPA and anticorruption enforcement developments involving the People’s Republic of China (PRC) are summarized below. As always, thanks go to Squire Sanders’ Shanghai Office for monitoring these developments.
1. New law or regulation
State level: No developments
Local level (Beijing & Shanghai): No developments
Communist Party Rules: No developments
2. Upcoming law or regulation
3. Government Action
(1) On April 3, 2013, Yu Guozhong (“Yu”), the former Deputy Director of Quzhou Transportation Bureau, Zhejiang Province, was sentenced to twelve and a half years in prison by the Intermediate People’s Court of Quzhou City for abuse of power and taking bribes.
During Yu’s term in office from 2001 to 2012, Yu reportedly accepted bribes from various enterprises and individuals amounting to RMB 765,200 (USD 124,120). In 2001, Yu accepted the equity interest of a public transport company without payment of any consideration, and then received bribes in the name of dividends totaling RMB 500,800 (USD 81,232). In return, Yu helped this company evade government administrative fees up to RMB 4.65 million (USD 754,257) from 2002 to 2008.
(2) On April 3, 2013, Wang Zongyuan (“Wang”), the former Director of the Administrative Committee of Suzhou Economic Development Zone, Anhui Province, was sentenced to 13 years in prison by the Intermediate People’s Court of Wuhu City for taking bribes in the amount of more than RMB 4 million (USD 648,824).
During Wang’s term as the Director of Suzhou’s Construction Committee and the Chief of Suzhou Economic Development Zone Administrative Committee, he abused his power to seek illicit benefits for individuals and enterprises on various projects such as bank loan, real estate development, grants for land use rights, demolition, land usage, applications for Mining Licenses, etc. Reportedly, Wang confessed to his crimes during the investigation and handed over all his illegal gains.
(3) On April 8, 2013, Luo Mensheng (“Luo”), the former Deputy Party Secretary of Lianzhou City, Guangdong Province, was sentenced to 5 years imprisonment with confiscation of RMB 100,000 (USD 16,220) in personal assets by the Intermediate People’s Court of Shaoguan City for corruption charges.
Reportedly, Luo was found guilty of taking bribes valued at RMB 1,190,000 (USD 193,015) and HKD 200,000 (USD 32,441) during his term as the Deputy Mayor and the Deputy Party Secretary of Lianzhou City. In exchange, Luo helped various companies illegally obtain construction tenders and land use rights. Luo was arrested on May 31, 2012 and confessed to his crimes during the investigation.
(4) On April 15, Sun Yongfa (“Sun”), the former chairman of state-owned CITIC Guoan Gold Company Limited, was reportedly sentenced to life in prison by the Intermediate People’s Court of Zhangye City, Gansu Province for embezzlement.
Sun was charged with transferring gold mining exploration rights to a private company named Haosheng Construction Materials Company Limited without any approval or authorization for RMB 10 million (USD 1.62 million). He also embezzled RMB 8 million (USD 1.29 million) and deposited it into his personal bank account. Sun denied all the charges during the trial of first instance and appealed the acquittal to higher court after the sentence announced by the Intermediate People’s Court of Zhangye City.
(5) On April 15, 2013, Liu Yuxin (“Liu”), the former Deputy Director of Construction Market Supervision Department of the Ministry of Housing and Urban-Rural Development, was reportedly sentenced to 12-years in prison with RMB 300,000 (USD 48,661) in personal assets being confiscated by the No. 1 People’s Court of Beijing Municipality for taking bribes.
According to prosecutors, during Liu’s term in Ministry of Housing and Urban-Rural Development from 2000 to 2011, Liu accepted bribes amounting to RMB 288,000 (USD 467,153) in various forms such as equity interest, vehicles, luxury watches, real estate, U.S. dollars, etc. In return, Liu helped certain companies which had provided him with bribes to pass their construction qualification examinations and obtain qualification certificates through the abuse of his position.
(6) On April 22, 2013, Peng Zaikui (“Peng”), the former Deputy Secretary of People’s Government of Changsha City, Hunan Province, was sentenced to 10 years in prison with personal assets worth RMB 500,000 (USD 81,103 ) confiscated by the People’s Court of Hengshan County.
During Peng’s term in office from September 1997 to October 2011, Peng allegedly took advantage of his position to seek illegal benefits from different real estate developers and contractors totaling more than RMB 3.32 million (USD 538,523), among which, RMB 588, 281 (USD 95,422) was provided to both Peng and Peng’s brother, Peng Bokui, who reportedly commits the crime of co-bribery.
(1) On April 19, the major online media of China, including People’s Daily Online, Xinhua Net, Sina and Sohu, opened their special webpages to the public for combating corruption and supervision. These webpages are highlighted on the sites’ home pages for easy access to online informant centers where the citizens can report officials involving corruption activities. This indicates that supervision by the public against corruption is playing a more and more important role in China.
(2) The Chinese government decided to slash 71 administrative approval items in an executive meeting of the State Council, presided over by Premier Li Keqiang (“Li”), on April 14, 2013. Although no details are announced regarding the slashed items, it was reported that the slashed items mainly concern the investment, production and operation projects. This move is believed to be a significant step to speed up the function transformation of government and empower market forces. In March 2013, Li announced that the Chinese government will cut the existing 1,700 administrative approval items by at least one third over the next five years.
5. China-related FCPA Action