On February 16, 2012, China’s Supreme People’s Procuratorate (“SPP”), the main investigatory and prosecutorial arm of the Chinese government, in conjunction with other PRC anti-corruption agencies, announced that a database listing individuals and companies found guilty of certain bribery offenses now has nationwide scope. Companies and individuals can now apply to have the SPP check nationwide to determine whether a particular individual or company has been convicted of certain bribery offenses in mainland China.
A database has been in existence since 2006 covering bribery offenses in certain sectors (construction, health/medicine, finance, education, and government procurement), and since September 2009 in all sectors. Previously, however, checks were limited to one province or region, requiring an applicant to check each province separately to attain nationwide coverage.
From official media reports, companies and individuals will continue to need to apply in writing to the SPP; the database is not publicly available for online searching. Companies need to submit a written application with the name and details of the individual or entity to be checked, along with a copy of the company’s business license.
The SPP announcement signals the integration of the provincial-level databases containing information about bribery-related convictions. The nationwide database reflects an effort to make information about bribery convictions more accessible to the public. (Criminal proceedings in China are sometimes closed to the public, judicial decisions are not always published or publicized, and criminal conviction records are not generally publicly available.)
The official media reports of an interview of an SPP official suggests that the offenses covered by the database include bribing an individual, bribing an entity, bribes paid by an entity, and facilitating bribery. Notably, information about individuals and entities accepting a bribe are not automatically included. The official media reports hold out the possibility that “bribery-related behavior” may be included in the database, even if the individual or entity were not formally convicted.
Further, the database does not appear to include affiliates or subsidiaries of convicted companies, nor would it list the principals of companies convicted of bribery offenses unless the principal were also convicted.
While several questions and limitations remain, the nationwide database is another potential tool for companies to use as part of their due diligence on intermediaries and business counterparties.
Eric Carlson, pictured above, is a Beijing-based attorney at Covington & Burling LLP. He specializes in anti-corruption compliance and internal investigations, with a particular focus on China and other regions of Asia. He speaks Mandarin and Cantonese and can be contacted here.
A fuller description of the database can be found here.