1. New laws or regulations

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

2. Upcoming laws or regulations

No developments.

3. Government Action

(1) On July 3, 2015, Li Fengchun (“Li”), the former Deputy Inspector of the Standing Committee of Xinyu Municipal People’s Congress and the former Chairman of General Trade Union of Xinyu City, Jiangxi Province was sentenced to 9 years in prison plus confiscation of personal property totaling RMB 150,000 (USD 24,169) by the Intermediate People’s Court of Ji’an City, Jiangxi Province for bribe-taking.

Allegedly, during the period from February 2007 to 2011, Li sought illegal benefits on several occasions from various bribe-givers, taking advantage of his positions as the party secretary and chairman of the general trade union of Xinyu City and the group leader for culture and art center construction projects of Xinyu City and receiving bribes amounting to RMB 2.941 million (USD 473,831). Most of the above bribes were under the control of Li’s mistress surnamed Li and were found to have been used for the purchase of her car and apartment and other daily expenditures.

Li was given a lighter sentence due to his confession to his crime, and his surrender of the bribed moneys and the prompt payment of fines.

(2) It was reported on July 11, 2015 that Fu Jun (“Fu”), the former Director of Education Bureau of Changjiang Li Autonomous County, Hainan Province, was sentenced by the No.2 Intermediate People’s Court of Hainan Province to 13 years in prison for taking bribes and receiving large amounts of unidentified property.

Fu was charged with taking advantage of his position and providing assistance to 7 companies and 20 individuals during his term of office from 2011 to 2014 in business undertakings and the payment of project prices relating to infrastructure construction, the purchase of educational facilities, and customization of school uniforms. Fu, in exchange, illegally accepted RMB 5.05 million (USD 813,486). Fu has voluntarily surrendered RMB 7.21 million (USD 1.16 million), including RMB 2.16 million (USD 347,946) for which Fu was unable to explain the source.

(3) On July 12, 2015, Xi Xiaoming (“Xi”), the Vice President of the Supreme People’s Court was accused of serious violation of laws and party discipline. Xi is currently under investigation by the Commission for Discipline Inspection of the Central Committee of the Communist Party of China.

(4) On July 16, 2015, Liang Ronghao (“Liang”), the former Deputy Director of Maritime Bureau of Qinzhou City, Guangxi Province, was sentenced by the Intermediate People’s Court of Qinzhou City to 11 years in prison plus confiscation of personal property valuing RMB 300,000 (USD 48,325) for taking bribes. All the bribes have been recovered and returned to the state treasury.

During his term of office from 2010 to 2011, Liang was found to have accepted bribes totaling RMB 2 million (USD 322,172) on 6 occasions to assist an investment company incorporated in Guangxi that wished to modify its license for sea area use to a land use certificate through the abuse of his office. Further, Liang was charged with taking advantage of his position during the period from 2011 to 2013 to provided assistance to another Qinzhou-based company that was completing its transfer of land use rights, for which Liang was found to have received more than RMB 2 million (USD 322,172).

(5) On July 24, 2015, Sun Jiaqun (“Sun”), a former Member of the Standing Committee of Pingxiang Municipal Committee of Shanxi Province, was sentenced by the Intermediate People’s Court of Yingtan City, Hunan Province to 15 years in prison for taking bribes, including personal property valued at RMB 1 million (USD 161,079), which was confiscated.

Reportedly, during his term of office from 2003 to 2013, Sun took advantage of his position and sought illegal benefits from bribe-givers in connection with project contracts, the settlement of project payments, project approvals, funding appropriation, job arrangement, etc. In return, Sun allegedly accepted bribes exceeding RMB 2.31 million (USD 372,094) personally, as well as RMB 8.4 million (USD 1.35 million) jointly with his nephew He Tao.
4. Other

No developments.
5. China-related FCPA Action

(1) On July 28, 2015, the Securities and Exchange Commission of the United States (the “SEC”) announced that Mead Johnson Nutrition Company (the “Company”), an infant-formula manufacture based in Illinois, had agreed to pay USD 12.03 million to settle civil charges arising from the improper payments by its Chinese subsidy, Mead Johnson (China) Nutrients Co. Ltd, (the “Guangzhou Company”), to Chinese state-owned hospital professionals for recommending the Company’s infant formula, including USD 3 million of civil penalty, USD 7.77 million of disgorgement and USD 1.26 million of prejudgment interest.

According to SEC, the Guangzhou Company funded the third party distributors who market and distribute the Company’s formulas in China in the name of “distribution allowance”, which is actually the off-the-books discount. Employees of the Guangzhou Company had control over and instructed the use of the funds, including providing cash and other incentives to professionals in state-owned hospitals to recommend the Company’s products to patients and obtain personal information of the patients for marketing purpose. SEC also pointed out that the Company failed to maintain sufficient internal control system to ensure the proper use of the funds.