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.
Change of Legal Environment
New law or regulation
State level: No developments
Local level (Beijing & Shanghai): No developments
Communist Party Rules: No developments
Upcoming law or regulation
(1) On August 3, 2012, the report of an internal investigation conducted by the Ministry of Railways revealed that Liu Zhijun (“Liu”), the former minister of railways, committed six disciplinary violations, including taking bribes and sexual misconduct.
Liu was removed from his position in 2011 on charges of corruption and expelled from the Communist Party of China earlier this year. Reportedly, Liu was charged with helping Ding Shuimiao (“Ding”), a Shanxi business woman, secure railway supply contracts in the amount of RMB 3 billion (USD 470 million) and allowed middlemen to take kickbacks during contract procurement. Ding’s company is alleged to have accepted RMB 10 million (USD1.6 million) from railway construction companies in bribes as sponsorship fees. In addition, Liu is also suspected of receiving bribes from four railway officials, some in the form of calligraphy paintings and other valuable artwork.
(2) On August 9, 2012, He Fuchang (“He”), the former Deputy Party Secretary and Deputy Chief of the Ningbo Public Security Bureau (“PSB”), was sentenced to death with two years’ reprieve by the Ningbo Intermediate People’s Court for receiving bribes exceeding RMB 16 million (USD 2.6 million) and for abusing his power as a government official. A death sentence with a two-year reprieve is usually reduced to life in prison if the convict behaves well while serving the term.
During his term from 2000 to 2011 as the acting mayor of Yuyao city and the party secretary of Ningbo PSB, He purportedly abused his power by manipulating the process for grant of land use rights and improperly assisting the promotion of certain government officials in exchange for bribes totaling RMB 16 million (USD 2.6 million).
(3) On August 10, 2012, Li Ji (“Li”), the former mayor of Haitangwan Town, Sanya, was sentenced to death with two years’ reprieve for receiving and seeking bribes in the amount of RMB 14.4 million (USD 2.2 million).
During Li’s term as the Mayor of Haitangwan Town, the Head of Haitangwan Management Committee and the Deputy Secretary of Hitangwan Town, Li was reportedly found guilty for abusing his position to facilitate, for the benefit of others, in the process of approval of land compensation and payment for contract engineering, in exchange for bribes from 2009 to 2011.
According to a spokesperson for the Sanya Discipline Inspection Committee, Li’s case was one of a series of corruption cases in recent years involving Haitangwan Town and there are as many as 104 suspects involved.
(4) On August 25, 2012, Cai Yabin (“Cai”), the former Deputy Director of the Shaoyang Public Security Bureau, Hunan Province, was sentenced to 12 years’ in prison by Shaoyang City Beita District People’s Court on charges of accepting bribes, providing bribes and failing properly to account for the sources of personal assets.
During Cai’s term from 1997 to 2012, Cai abused his position to seek illegal gains for others in administrative enforcement procedures and infrastructure construction projects and received over RMB2. (USD 7,870) and USD 3,000 to the former Chief of 19 million (USD 344,719) in bribes. In 2006, Cai also provided RMB 50,000 Xiangtan City Public Security Bureau. In addition, Cai was unable to identify the source of nearly RMB 6 million (USD 944,436) of his personal assets.
(5) On August 27, 2012, Wang Baojun (“Wang”), the Secretary of Beijing Chaoyang District Agriculture Committee, was reportedly sentenced to ten years in prison for corruption involving RMB260,000 (USD41,000). Wang’s case is one of a series of corruption prosecutions against the agriculture committee following the arrest of some of the committee’s finance staff. The former Chaoyang District deputy mayor Liu Xiquan is likewise facing charges for accepting bribes totaling RMB 1.8 million (USD284,000) in connection with the case.
(6) In late August, 2012, Wang Guoqiang (“Wang”), the former Party Chief of Fengcheng City, Liaoning Province, allegedly left China in April or May after transferring more than RMB 200 million (USD 31.4 million) in embezzled funds to the United States on April 24, 2012. Wang was being investigated for taking bribes from a local heating company and some property developers from April 28, 2012 and was removed from his position and expelled from the Communist Party of China on August 15, 2012.
(1) On August 21, 2012, He Guoqiang (“He”), a member of the Standing Committee of the CPC Political Bureau and Secretary of the Central Commission for Discipline Inspection, said in a meeting that China will implement a five-year plan for eliminating corruption after the upcoming national congress of the Communist Party of China. He stressed the importance of improving anti-corruption efforts and described the improvement as a “dynamic and long-term strategic project”.
(2) To further clear systemic obstacles to social and economic development and to curb corruption, the State Council of China announced its decision to remove or modify 314 administrative examination and approval items. The decision was made in a statement released after an executive meeting of the State Council that was presided over by Premier Wen Jiabao on August 22, 2012.
(3) On August 12, China’s supreme procuratorate called for an intensified crackdown on officials abusing positions of power in the railway sector. According to the Supreme People’s Procuratorate, efforts will be centered on crimes involving ticket sales, construction projects, and procurement and supply of materials.