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China’s changing view of bribe givers

It has been typical under PRC law for bribe takers to be punished more severely than bribe givers. The policy was to punish extortion and incentivize cooperation with government investigations. But as recent investigations into the sales practices of big pharmaceutical companies have shown, this policy may be changing.

The traditional assumption in China has been that bribe takers refused to perform their job without receipt of the bribe, and that bribe givers have little to no choice. The official, on the other hand, not only received a bribe but extorted money from an individual or entity who may not have otherwise offered a bribe. The law then logically gives a greater punishment to the individual who has done the most wrong.

The second reason to punish bribe takers more harshly is to entice the bribe giver to come forward as a witness against the bribe taker, who is more likely to be a repeat offender. The closest equivalent in U.S. law is the plea bargain, which is negotiated on an individual basis between the prosecutor and defendant and may involve a lighter sentence in return for testifying against another defendant.

However, China’s approach to punishing bribe givers may be changing. Two recent cases will serve to illustrate bribe givers who received harsher punishments than the bribe takers.

Between 2006 and 2010, “Mr. Wang,” a distributor in Beijing of a tuberculosis drug manufacturer, paid more than RMB 3 million ($490,000) in bribes to doctors and managers at community hospitals for prescribing and selling his company’s drug. The bribes included kickbacks, gift cards, cigarettes and other small gifts. The kickbacks alone were RMB 15 ($2.45) for each bottle of the drug and amounted to over 20% of the hospitals’ purchase price.

Mr. Wang, was convicted of giving bribes and other bribe-related crimes and sentenced to 15 years in prison and a RMB 100,000 ($16,350) fine. While the hospital managers and doctors were charged with taking bribes, all were given much lighter punishments.

Similarly, around 2011, a “Mr. “Zhu” in Guangdong province was convicted of giving bribes of RMB 16 million ($2.6 million) to government officials. He was sentenced to 16 years in prison. The officials were also punished, but all of them less severely than Mr. Zhu.

As China’s enforcement approach against bribe givers changes, so do the risks for business people and those advising them. Although past cases showed a harsher approach against bribe takers, it is becoming more common for the law to fall harder on bribe givers.

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Henry Chen can be contacted here.

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