On November 3, 2014, China’s legislature released for public comment (Chinese) draft amendments to China’s Criminal Law (“the Draft Amendments”), a number of which broaden and strengthen crimes and penalties related to bribery and corruption. This post summarizes the key developments related to bribery and corruption:
Raise the bar for bribe-givers to be exempted from punishment. Article 390 of the current Criminal Law provides that “[a]ny briber who, before he is investigated for criminal responsibility, voluntarily confesses his act of offering bribes may be given a mitigated punishment or exempted from punishment.” The Draft Amendments would retain the voluntary confession requirement and add other requirements for exemption from punishment: “one whose crimes are relatively minor may be exempted from punishment, if by exposing corrupt activities of others he provided crucial information leading to the successful investigation of a major case, or he performed other major meritorious service.”
Add a new crime of offering bribes to close relatives of State functionaries. The Draft Amendments would add a crime (as Article 388b) of offering bribes to “any of the close relatives of a State functionary or other persons closely related to that State functionary; or any ex-State functionary, their close relatives or other persons closely related to them.” (Draft Amendment, Art. 40: “为谋取不正当利益，向国家工作人员的近亲属或者其他与该国家工作人员关系密切的人，或者离职的国家工作人员或者其近亲属以及其他与其关系密切的人行贿 的，处二年以下有期徒刑或者拘役，并处罚金；情节严重的，或者使国家利益遭受重大损失的，处二年以上五年以下有期徒刑，并处罚金；情节特别严重的，或者使 国家利益遭受特别重大损失的，处五年以上十年以下有期徒刑，并处罚金。”) In 2009, the Criminal Law was amended to expand the scope of bribe-receivers to include close relatives and individuals with close relationships with State functionaries and ex-State functionaries. (Amendment VII to the Criminal Law, February 28, 2009, Art. 13, available here.) However, that amendment did not impose criminal penalties on the bribe-givers. The Draft Amendments would expand the categories of bribe-givers to parallel the categories of bribe-receivers.
Add monetary fines to various corruption/bribery-related crimes. Under the current version of the Criminal Law, fines are imposed for corrupt activities only on legal entities, with one exception: fines are imposed on individual bribe-givers only when (1) bribing an employee of a company or enterprise, or to a foreign party performing official duties or an official of international public organizations; and (2) the amount involved is huge (Art. 164). The Draft Amendments would impose monetary fines against all individuals that are convicted of engaging in corruption and bribery offences, in addition to other punishments.
Modify the sentencing standards for the crimes of embezzlement and receiving bribes. The existing sentencing standards (Articles 383 and 386) impose prison sentences based on the specific value of the property that they embezzled or received. The Draft Amendments would eliminate the amount-based standards and allocate punishment on more general criteria: (1) a “relatively large” amount or “relatively serious” circumstances; (2) a “huge” amount or “serious” circumstances, and (3) an “especially huge” amount or “especially serious” circumstances. The Draft Amendments do not include guidance on how courts should apply the new standards, and a judicial interpretation may later be issued with clarifications.
Possible employment bans for corruption convictions. In situation where one received criminal punishment for “taking advantage of his/her position” or “violating the obligations of one’s profession,” a court has the discretion to bar him/her from engaging in related profession for five years after completing his/her prison sentence, or for five years after release on parole.
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Public comments are due by December 3. Interestingly, the Draft Amendments do not include a widely discussed prohibition on government officials receiving gifts.
For more details about the Draft Amendments, including a chart comparing the existing Criminal Law and corruption-related modifications proposed by the Draft Amendments, see a Covington e-alert in English here (pdf); a Chinese version of the e-alert is being prepared and can be obtained from me.
Eric Carlson, a contributing editor of the FCPA Blog, is a partner 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.