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
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 June 7, 2013, Li Yuntian (“Li”), the former Director of Water Resource Bureau of Nanhai District, Foshan City, Guangdong Province, was reportedly sentenced to 15 years in prison for taking bribes and embezzling public funds by the Intermediate People’s Court of Foshan City.
Li was charged with abusing his position for illegal benefits from construction contracts awarded to 13 individuals during his term from 1992 to 2011. These benefits allegedly amounted to RMB 5.71 million (USD 931,392), HKD 1.16 million (USD 189,214), and USD 20,000. Li was also charged with embezzling public funds totaling RMB 2 million (USD 326,232) for personal use. According to the court, Li was given a lighter sentence because he confessed to his crimes and handed over most of his illegal gains during the investigation. The local procuratorate, however, claimed Li had not voluntarily confessed his crimes and therefore is appealing the judgment. A second trial date has not yet been announced.
(2) On June 7, 2013, Peng Yaohua (“Peng”), the former Deputy Secretary-General of Huangshi City, Hubei Province, was sentenced to 8 years in prison and fined RMB 400,000 (USD 65,246) for taking up to RMB 860,000 (USD 140,279) in bribes and embezzled funds.
According to prosecutors, Peng accepted bribes from more than ten real estate developers during the period 2007 to 2011. As a member of the “Supporting Team for Post-Earthquake Reconstruction” in Wenchuan County, Sichuan Province in 2008, Peng and his mistress allegedly took kickbacks in the amount of RMB 250,000 (USD 40,779) by purchasing school uniforms and desks from suppliers introduced by Peng’s mistress. Peng’s mistress, surnamed Dong, was sentenced to ten and a half years for profiting from Peng’s corruption.
(3) On June 18, 2013, Ren ZengLu (“Ren”), the former Deputy Director of the Standing Committee of People’s Congress in Pingliang City, Gansu Province, was reportedly sentenced to life imprisonment with confiscation of personal assets for taking bribes by Intermediate People’s Court of Lanzhou City, Gansu Province.
During his term in office from December 2005 to June 2012, Ren was found guilty of accepting bribes amounting to RMB 9.91 million (USD 1.61million). He was also found to have other unexplained property valued at more than RMB 4 million (USD 652,464). The court determined that Ren took advantage of his position by awarding 16 private enterprises and various individuals with construction projects and personnel promotions.
(4) On June 21, 2013, Kong Fantai (“Kong”), the former Deputy Chief of State-owned Assets Supervision and Administration Commission of Shandong Province (“Shandong SASAC”, an institution authorized by State Council to supervise and manage the assets of state-owned enterprises), was allegedly sentenced to 12 years in prison by Intermediate People’s Court of Heze City, Shandong Province for taking bribes.
During his term with Shandong SASAC from 2005 to 2011, Kong was found to have taken advantage of his position to help a Guangdong pharmaceutical company win a vaccine bid in 2010 and also to have illegally helped several individuals seeking job opportunities and personnel promotions. Personal assets of Kong amounting to RMB 1.85 million (USD 301,764) were confiscated by the court.
(5) On June 28, 2013, Lei Zhengfu (“Lei”), the former Secretary of Beibei District Committee of the Communist Party of China, Chongqing Municipality, was sentenced to 13 years in prison with confiscation of personal assets in the amount of RMB 300, 000 (USD 48,934) by the No.1 Intermediate People’s Court of Chongqing Municipality.
Reportedly, Lei was removed from his position after a video featuring him having sex with a woman was posted online. The resulting scandal led to the downfall of more than 20 government officials and state-owned enterprise officials in Chongqing. Lei was accused of taking advantage of his position to collect bribes of more than RMB 3.16 million (USD 515,446) in order to pay RMB 3 million (USD 483,800) to a businessman who blackmailed him with the release of the aforesaid sex video.
Cao Jianming (“Cao”), the Prosecutor General of the Supreme People’s Procuratorate of China, made a speech at the fifth seminar of the International Association of Anti-corruption Authorities on June 23, 2013, noting that anti-corruption is a long-term and arduous task for countries throughout the world and that more cooperation on technical assistance and information exchange will be crucial to improve the anti-corruption capabilities of the developing countries. China is willing to expand its cooperation with the international community regarding anti-corruption in a more active, open, and pragmatic manner, said Meng Jianzhu, the Secretary of the Commission for Political and Legal Affairs of the Communist Party of China at the same seminar.
5. China-related FCPA Actions