Jianwei (Jerry) Fang
Zhong Lun Law Firm, Shanghai
jfang@zhonglun.com

Chenqian Li
Zhong Lun Law Firm, Shanghai
cheqianli@zhonglun.com

Jiaying Jiang
Zhong Lun Law Firm, Shanghai
jiangjie@zhonglun.com

Legal framework of Chinese anti-corruption laws and policies

In the Chinese legal system, provisions addressing commercial bribery are dispersed across various legal instruments and judicial interpretations. Among the different legal authorities in China, the core provisions guiding anti-corruption can be found in the Anti-Unfair Competition Law and its draft Amendment (issued in 2022 and still open for public comment); the Criminal Law of China, along with its amendments; and the Supervision Law of China and its accompanying regulations for implementation. Moreover, in critical sectors, such as pharmaceuticals, bidding and tendering, government procurement, construction and finance, potential instances of commercial bribery are governed by industry regulations and local ordinances.

New trends in Chinese anti-corruption laws and practice

Given the flexibility and diversity inherent in commercial activity, the forms of bribery within commercial contexts vary widely. In response to the urge to preserve integrity and fair competition in the market, China has demonstrated a heightened commitment in recent years to combating commercial bribery through the enactment of stricter, more comprehensive and resolute legislative measures and policy initiatives.

Complete, comprehensive and systematic measures to fight corruption

Criminal Law of the PRC

In December 2023, the Amendment (XII) to the Criminal Law of China (the ‘Amendment’) (effective as of 1 March 2024) was released, introducing several noteworthy changes. First, in terms of the crime of accepting bribery by non-government officials, the Amendment increases the categories of offences and penalties thereof, imposes monetary penalties for each category and escalates the maximum penalty for the crime, from 15 years of imprisonment to life imprisonment. Second, the Amendment further specifies the penalties for offences related to the corruption of personnel within private enterprises and extends the scope of existing offences applicable to personnel associated with ‘state-owned companies and enterprises’, thereby ensuring equal protection for the assets of both state-owned and private entities.

Anti-Unfair Competition Law of the PRC

In addition to the existing Article 7 of the Anti-unfair Competition Law, the draft Amendment of Anti-unfair Competition Law (the ‘Draft Amendment’) released in 2022 (has not taken effect yet): (1) defines the receiver of bribery as punishable by law; (2) enlarges the scope of offering bribery to include instructing other individuals to offer bribery; and (3) enhances law enforcement against commercial bribery, specifically, penalties for commercial bribery are made more stringent; the authority for seizing and freezing assets is further provided at the county level; and assets to be seized are expanded to include accounts held by third parties.

Notices by the CPC Central Commission for Discipline Inspection

Over the past three years, the central commission of the Central Committee of the Communist Party of China (CPC), especially the CPC Central Commission for Discipline Inspection, has also issued several notices on fighting corruption. In particular, in its recent articles and work report of 2023, it repeatedly promoted that the ‘receipt and payment of bribery should be investigated altogether’ (in Chinese:受贿行贿一起查), so that the persons offering the bribe shall be blacklisted or restricted regarding market access and/or applications for certain qualifications, thus effectively breaking the chain of interest and preventing bribery.^[1]

Further and deepened efforts made in key fields

Another trend in Chinese anti-corruption law and policy seen in recent years is the emphasis on preventing corruption in certain fields that are believed to be hotbeds for corruption. To be specific, regulatory measures for industries including pharmaceuticals, tobacco, energy, finance, construction, bidding and government procurement have been revisited and strengthened, both by central and local governments, in an effort to fight bribery.

For instance, in a notice jointly issued in 2021, the National Health Commission and the National Administration of Traditional Chinese Medicine of China called for an operation improving the integrity of medical institutions and staff, which will last until the end of 2024.^[2] The aforementioned notice lists in detail the supervision and inspections to be carried out, such as establishing a mechanism to combat the offering and receipt of gifts and kickbacks among patients, pharmaceutical companies and medical staff. Furthermore, the newly published Amendment (XII) to the Criminal Law of China explicitly imposes heavier punishment for offering bribes in the field of drugs and medical care.^[3] Under the impact of action against corruption in medical institutions, local governments have also subsequently issued policies to enforce and supplement central legislation.