Voices from the field – Leon Liu

Leon Liu
Junhe, Shanghai

In your professional experience, what is the most significant anti‑corruption risk or enforcement challenge currently affecting your country or region?

For China-related matters, the most significant challenge today is the evolving meaning of ‘foreign-related law’ amid intensifying great power competition. This has significant implications for Chinese companies going global, foreign companies operating in China and entities that have business dealings with them.

In the past, when discussing ‘foreign-related’ matters in China, the analysis typically focused on the laws of the host jurisdiction, major capital-exporting jurisdictions with extraterritorial reach and relevant international conventions.

Today, however, China’s understanding of foreign-related rule of law gives priority to national security, focuses on analysing, responding to and counteracting improper foreign legal claims.

As a result, a corruption allegation involving a sensitive Chinese nexus may more easily be elevated into a national security issue and, in turn, raise complex questions, including extraterritorial jurisdiction, sanctions and counter-sanctions, state secrets protection, data security, technology import and export controls and extradition risk.

How is this issue being addressed in your organisation, sector or jurisdiction?

There is a well-tested methodology that combines risk assessment with crisis response.

At the risk-assessment stage, risks that may rise to the level of national security rarely emerge in a vacuum. Counsel must be able to identify sensitive sectors, periods and relationships through legal, political and international-relations lenses and engage with public authorities appropriately where necessary.

In crisis response, counsel must manage data and technology risks, coordinate with foreign counsel, assess cross-jurisdictional consequences and use new technologies appropriately. This integrated approach can help entities navigate the most acute phase of a crisis.

Based on your experience, what is one practical lesson, implementation challenge or effective approach that may be relevant to practitioners in other jurisdictions?

The world is undergoing profound change, with 'black swan' and 'grey rhino' events occurring more frequently. This has profoundly shaped our practice. For example, major diplomatic or geopolitical events are often accompanied by legal actions. Assessing and responding to those actions requires an understanding of the relevant country’s national interests, cultural narratives and detailed legal rules, as well as the ability to translate that understanding into a practical response plan. In this respect, the East and West share common features, but also differ in important ways. Understanding both the similarities and differences is one of the most interesting parts of our work.

Looking ahead, what emerging development, regulatory shift or risk area are you monitoring most closely?

Recently, China issued its first order under its Blocking Rules and identified its first case of improper extraterritorial jurisdiction under the Regulation on Counteracting Improper Foreign Extraterritorial Jurisdiction. These developments demonstrate rapid changes in China’s foreign-related rule of law, as well as China’s growing emphasis on national agency in international legal interactions. In the anti-corruption field specifically, China’s Anti-Cross-Border Corruption Law is expected to be finalised soon. It is expected to address issues such as jurisdiction over cross-border corruption, enforcement mechanisms and judicial cooperation. Whether it will develop global significance comparable to the FCPA remains to be seen.