China’s anti-commercial bribery legislation and enforcement

In 2008, the State Administration for Industry and Commerce (SAIC) and offices at the local level (AICs) investigated and handled more than 6,000 commercial bribery cases. Although the number of cases investigated in 2009 dropped to 3,775, the amounts involved in individual cases increased markedly. Furthermore, criminal convictions for commercial bribery in sectors including pharmaceuticals, construction and government procurement have become common. The recently tried Rio Tinto case is a case in point.

This article outlines the current anti-commercial bribery legislation in China and its enforcement, so as to assist foreign enterprises and investors to make their business activities in China more compliant.

Compliance obligations

Foreign-invested enterprises in China and their investors are required to comply with both domestic Chinese and foreign laws on commercial bribery. This includes laws of the home countries of foreign investors that are aimed at curbing acts of commercial bribery committed outside the home country by the offshore subsidiaries of the investors.