The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Articles By Topic

By Topic: Chinese Anti-Corruption Law

  • From Vol. 7 No.19 (Sep. 19, 2018)

    Compliance Challenges When Working With JV Partners in China

    Multinational companies face unique compliance challenges when partnering with local companies to form joint ventures in China, particularly when the partner is also a state-owned entity. Recent FCPA enforcement actions reflect the continued attention U.S. regulators pay to business activities in China, including those involving JVs. In a guest article, Mimi Yang, David Zhang and Karen Oddo of Ropes & Gray explain how to effectively navigate these complex anti-corruption risks. They argue that multinational corporations need to take a proactive approach, from pre-deal due diligence of a potential JV partner through post-investment integration and implementation of a strong compliance program, to ongoing training and monitoring. See “Anti-Corruption Provisions in Third-Party Contracts in China” (Jun. 7, 2017).

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  • From Vol. 6 No.20 (Oct. 18, 2017)

    Reconciling Data Localization Laws and the Global Flow of Information

    Data localization is the most contentious issue for privacy regulators and the increasingly data-driven global business community, data privacy professionals said in Hong Kong at the Conference of Data Protection and Privacy Commissioners. Our sister publication PaRR provides insights from Apple and Microsoft executives, as well as Chinese data privacy experts, on the state of “data nationalism” in the global business place. See “The Sword of Damocles in the Information Age: How to Face the New Challenges Under the Chinese Cybersecurity Law” (Feb. 15, 2017).

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  • From Vol. 6 No.15 (Aug. 2, 2017)

    Nestlé Employee Convictions Highlight Interconnectivity of Chinese Data Privacy and Bribery Laws 

    Six Nestlé employees and three employees of state-run Chinese hospitals were recently convicted for crimes relating to the illegal distribution of personal information. At the Lanzhou Intermediary People’s Court, the Nestlé employees were found guilty of illicitly obtaining personal information by providing bribes to foreign officials. Members of the hospital staff were found guilty of providing that information. Notably, the charges were brought under laws relating to the distribution of breast milk substitutes, not anti-bribery, data privacy or cybersecurity laws. The Anti-Corruption Report’s sister publication, PaRR, discussed the case with local experts who explained how Nestlé escaped liability and how the decision highlights the complicated nature of risk in China. See “Practitioners Take the Pulse of Anti-Corruption Compliance and Enforcement in China” (Mar. 15, 2017).

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  • From Vol. 6 No.11 (Jun. 7, 2017)

    Anti-Corruption Provisions in Third-Party Contracts in China

    Like in most countries, anti-corruption enforcement actions in China are often triggered by third-party misconduct. As more and more multinational companies start to enforce the anti-corruption provisions in their Chinese third-party contracts, practical issues emerge. For example, a third party may not cooperate with an audit because it claims the audit provision is vague. In a guest article, Kate Yin and Samuel Yu, from the Chinese firm Fangda Partners, advise on how a company can anticipate these issues and effectively protect itself using anti-corruption provisions in third-party contracts. See The FCPA Report’s series on third-party contracts, “A Guide to Anti-Corruption Representations in Third-Party Contracts: Nine Clauses to Include (Part One of Two)” (Jun. 25, 2014); “Clauses for High-Risk Situations and Enforcement Strategies (Part Two)” (Jul. 9, 2014).

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  • From Vol. 6 No.7 (Apr. 12, 2017)

    The Effect of China’s Two-Invoice System on Anti-Corruption Compliance for Drug Companies 

    Drug sales in China are rife with corruption risk – both in terms of violations of the FCPA and local Chinese anti-corruption laws. By restricting the number of tax-valid invoices in the drug procurement industry chain, China’s new “Two-Invoice System” aims to reduce that risk by increasing the transparency of pharmaceutical product distribution. But, compliance lawyers told our sister publication Policy and Regulatory Report (PaRR), the rule may actually introduce anti-corruption risks for drug companies changing distribution strategies to comply. See “Travel Agencies, Fapiao and Hospitality: $12.8 Million SciClone Settlement Highlights Diversity of Risk in China” (Feb. 10, 2016).

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  • From Vol. 6 No.5 (Mar. 15, 2017)

    Practitioners Take the Pulse of Anti-Corruption Compliance and Enforcement in China

    China’s aggressive but sometimes opaque anti-corruption efforts have been making headlines for the past several years and companies are facing a “fluid enforcement environment,” according to Nathan G. Bush, a partner at DLA Piper. The domestic anti-corruption efforts of President Xi Jinping’s regime and uncertainty over how the Trump administration will enforce the FCPA and interact with Beijing make anti-corruption compliance particularly challenging. A recent Strafford seminar featuring Michael S. Diamant and Michael Li-Ming Wong, partners at Gibson Dunn, and Cindy Hong, a partner at K&L Gates, offered a thorough overview of the current state of the anti-corruption and political climate in China. This article summarizes the key insights from the program. See our two-part series on China’s State Secrets Law: “A Primer for Anti-Corruption Practitioners (Part One)”(Jun. 29, 2016); and “Six Things to Consider When Engaging in Internal Investigations in China (Part Two)” (Jul. 13, 2016).

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  • From Vol. 6 No.4 (Mar. 1, 2017)

    Nine Months After SEC Settlement, Las Vegas Sands Pays $7M Penalty to Bring DOJ Investigation to a Close

    Just one day before the recent change in administration, the DOJ announced its settlement with Las Vegas Sands Corp. to resolve FCPA charges stemming from payments made to a politically connected consultant doing business in China and Macao between 2006 and 2009. The deal is notable for the relatively small penalty involved given the behavior at issue and the cash flow of the company, as well as for the unusual lag between the resolution of the DOJ matter and an earlier one with the SEC over substantially the same facts. See “A Shady Consultant and Lackluster Accounting in China Wins Sands a $9 Million Penalty” (Apr. 20, 2016).

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  • From Vol. 5 No.25 (Dec. 21, 2016)

    What to Expect From China’s Revised Commercial Bribery Law

    Draft revisions to China’s Anti-Unfair Competition Law, a wide-ranging statute governing e-commerce, trade secrets, false advertising and commercial bribery, were made public in February 2016. The revisions to the law, which was originally passed in 1993, include a new definition of commercial bribery, clarify when corporations can be held accountable for corrupt payments made by employees and expand the investigatory powers of the State Administration of Industry and Commerce and local AICs. The proposed new language, however, lacks clarity and possibly conflicts with existing law, Chinese attorneys told The FCPA Report’s sister publication Policy and Regulatory Report (PaRR). See The FCPA Report’s two-part series on data security in China: “Crossing the River by Feeling the Stones (Part One of Two)” (Sept. 14, 2016); and “Performing Due Diligence and Internal Investigations (Part Two)” (Sep. 28, 2016).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    Six Things About State Secrets to Consider When Engaging in Internal Investigations in China (Part Two of Two)

    China’s state secrets law is the source of much angst for lawyers. While the concept of protecting state secrets is straightforward – and common to most countries – the breadth and ambiguity of China’s law, and the inconsistent way it is enforced, create unique compliance challenges for companies operating in the PRC, particularly those faced with an internal investigation of a possible anti-corruption violation. In the first part of this two-part series on China’s state secrets law, we discussed the relevant legal framework and how state secrets are defined. In this second article, we discuss six concerns a company needs to address when formulating a sensible investigation strategy based on insights from lawyers on the ground in China. See “Fighting the Dynamic War on Corruption in China” (Oct. 21, 2015).

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  • From Vol. 5 No.13 (Jun. 29, 2016)

    A Primer on China’s State Secrets Law for Anti-Corruption Practitioners (Part One of Two)

    The high incidence of FCPA settlements involving allegations of corruption in China hints at a much wider number of companies facing possible anti-corruption issues that need investigation in the PRC. But China’s laws on reviewing and transmitting certain types of data present unique complications for companies performing internal investigations. In particular, China’s state secrets law is one of the greatest sources of complexity for foreign companies and their counselors. Vaguely worded and inconsistently enforced, the law forbids the transport of certain documents outside of the PRC. The FCPA Report recently spoke with a number of attorneys working in Asia to demystify this area of law and get tips on how to practically conduct an internal investigation while minimizing risk. In this, the first part in a two-part series, we explain the framework of the state secrets law and what types of information and data it may cover. In the second part we will discuss practical implications of the law for companies engaged in cross-border investigations. See “The Emperor Is Far Away: The Evolving Nature of Third-Party Risk in China” (Sep. 9, 2015).

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  • From Vol. 5 No.13 (Jun. 29, 2016)

    Foreign Attorneys Share Insight on Data Privacy and Privilege in Multinational Investigations

    Multi-jurisdictional anti-corruption investigations are proliferating and subject companies must manage competing requests and competing legal regimes. At the recent White Collar Crime Institute presented by the New York City Bar Association, a panel of foreign lawyers delved into the challenges faced by counsel confronting multinational regulatory actions, including coordinating requests from multiple jurisdictions, preserving attorney-client privilege, conducting witness interviews and navigating data privacy laws. The panel featured attorneys based in London, Geneva, Hong Kong and Sao Paulo. See “How the Expanding Petrobras Scandal May Spark a New Era of Multi-Lateral Enforcement” (Dec. 2, 2015).

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  • From Vol. 4 No.19 (Sep. 23, 2015)

    Responding to China’s Aggressive Anti-Corruption Enforcement

    The DOJ and SEC’s sustained focus on corruption in China, combined with China’s own anti-corruption push, has left many multi-national companies scrambling to strengthen their compliance programs.  On September 30, Paul Hastings, EY and The FCPA Report will host a symposium in Washington, D.C., addressing how companies can mitigate risk when operating in China.  The FCPA Report’s Editor-in-Chief, Nicole Di Schino, will moderate the event.  The panelists, all recognized experts in Chinese anti-corruption, include: Nat Edmonds, a Paul Hastings partner and former FCPA prosecutor; Ananda Martin, a partner in Paul Hastings’ Shanghai office; and John Auerbach, a partner and former Greater China managing partner in EY’s fraud investigation and dispute services group.  For more information on the symposium please contact Nicole Di Schino at ndischino@fcpareport.com.  To RSVP, please click here.

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  • From Vol. 4 No.18 (Sep. 9, 2015)

    The Emperor Is Far Away: The Evolving Nature of Third-Party Risk in China

    The sheer volume of dollars that flow through the Chinese economy, combined with the evolving nature of corruption risk, make it essential that companies operating there remain ever vigilant and frequently re-evaluate the risk profile of their Chinese operations.  On September 30, Paul Hastings, EY and The FCPA Report will host a symposium in Washington, D.C. addressing how companies can mitigate risk when operating in China.  The FCPA Report’s Editor-in-Chief, Nicole Di Schino, will moderate the event.  The panelists, all recognized experts in Chinese anti-corruption, include: Nat Edmonds, a Paul Hastings partner and former FCPA prosecutor; Ananda Martin, a partner in Paul Hastings’ Shanghai office; and John Auerbach, a partner and former Greater China managing partner in EY’s fraud investigation and dispute services group.  In advance of the September 30 symposium, The FCPA Report spoke with Edmonds, Martin and Auerbach regarding one of the biggest risk areas facing companies operating in China – third parties.  For more information on the symposium please contact Nicole Di Schino at ndischino@fcpareport.com.

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  • From Vol. 4 No.14 (Jul. 8, 2015)

    Regional Risk Spotlight: William McGovern of Kobre & Kim Advises on How to Handle Corruption Risk When Doing Business in China

    China has long been plagued with high corruption risk.  However, the recent uptick in China’s own anti-corruption enforcement – evidenced recently by the fine the Chinese government levied on GSK – is changing the corruption landscape there, as is the steady focus on China by U.S. regulators.  In this installment of The FCPA Report’s Regional Risk Spotlight series, we talk to William McGovern, a partner in Kobre & Kim’s Hong Kong office, about the most pressing corruption issues in China and how companies doing business there can handle them.  See also “Understanding and Tackling China’s Corruption Challenges,” The FCPA Report, Vol. 3, No. 5 (Mar. 5, 2014).

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  • From Vol. 4 No.10 (May 13, 2015)

    Deciphering the Chinese Anti-Corruption Landscape

    Corruption risk has loomed large for companies operating in China for a long time.  However, recent events may be changing the landscape there – both the aggressive FCPA enforcement by U.S. regulators and the well-publicized battle against corruption by the Chinese government may be having an impact.  A recent program sponsored by Clear Law Institute surveyed the current FCPA enforcement climate as it relates to China, discussed China’s internal anti-corruption efforts, and offered strategies for anti-corruption compliance in China.  The program featured Michael Diamant, a partner at Gibson Dunn.  See also “A Guide to Anti-Bribery Issue Spotting in China: Enforcement Trends, Third-Party Risks, Gift Giving, Travel Expenses, Foreign Officials and Due Diligence,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013); and “Gibson Dunn Attorneys Take the Pulse of Anti-Corruption Risks in Emerging Markets,” The FCPA Report, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 3 No.19 (Sep. 24, 2014)

    Analyzing GSK’s Record-Breaking Chinese Bribery Fine

    China has fined GlaxoSmithKline a record 3 billion yuan ($489 million) for paying bribes to hospitals and doctors to prescribe its products, closing a fifteen-month investigation into the company’s activities there.  FCPA experts shared insights with The FCPA Report about the impact of the historic decision on GSK and other multi-national companies operating in China.  See also “Seven Lessons from China’s Bribery Investigation of GlaxoSmithKline,” The FCPA Report, Vol. 2, No. 16 (Aug. 7, 2013).

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  • From Vol. 3 No.5 (Mar. 5, 2014)

    Understanding and Tackling China’s Corruption Challenges

    “The FCPA applies with special force in China due to China’s state-dominated economy and pervasive business culture where petty corruption is common and tolerated,” Professor Daniel Chow said at a recent seminar at Fordham Law School sponsored by the Chinese Business Lawyers Association.  Chow and two other panelists, Paul Hastings partner Nat Edmonds, and Dorsey & Whitney partner Thomas Gorman, along with the Honorable Denny Chin of the U.S. Court of Appeals for the Second Circuit (who gave closing remarks), discussed the unique risks companies face in China, the cultural sensitivities that make compliance difficult, the status of China’s enforcement of its own corruption laws and practical recommendations for doing business ethically in a region where many businesses can reap big rewards.  Professor Sean Griffith of Fordham Law School gave opening remarks and Associate Professor Carl Minzner moderated.  See also “Gibson Dunn Attorneys Take the Pulse of Anti-Corruption Risks in Emerging Markets,” The FCPA Report, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    Gibson Dunn Attorneys Take the Pulse of Anti-Corruption Risks in Emerging Markets

    The anti-corruption enforcement landscape is changing and emerging markets, with their endemic cultures of corruption and vast economic opportunity for many multi-national companies, are at the forefront of that change.  Many are implementing and enforcing their own laws, but the deep-seated risks of corruption still exist.  A recent panel of emerging market experts from Gibson Dunn & Crutcher LLP highlighted the current anti-corruption initiatives and trends in key foreign markets.  The presentation, “FCPA Trends in the Emerging Markets of China, the Middle East and Africa, Russia and India,” featured Gibson Dunn partners F. Joseph Warin, Benno Schwarz, Kelly S. Austin and Peter Gray.  See also “Lessons from the Latest Anti-Corruption Developments in the U.K., Brazil and China,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    A Comparison of Five Major Anti-Bribery Laws

    In this era of increasing international cooperation, anti-corruption compliance programs cannot consider only the FCPA.  Various anti-bribery regimes must be addressed in a multi-national company’s program to adequately protect the company from the growing threat of global enforcement. In a guest article, T. Markus Funk and Sambo “Bo” Dul, attorneys at Perkins Coie, provide a comparison of the different anti-corruption laws in the U.S., the U.K., China, Germany and India.

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    A Comparison of Anti-Bribery Laws in the U.S., U.K., China, Germany and India

    In this era of increasing international cooperation, anti-corruption compliance programs cannot consider only the FCPA.  Various anti-bribery regimes must be addressed in a multi-national company’s program to adequately protect the company from the growing threat of global enforcement and “carbon copy” prosecutions.  This chart, developed by T. Markus Funk and Sambo “Bo” Dul, partner and associate, respectively, at Perkins Coie LLP, helps with the task of creating a comprehensive anti-bribery program by comparing the main provisions of five anti-bribery laws that companies should be wary of – laws in the U.S., the U.K., China, Germany and India.  See “Assessing the Year in FCPA Enforcement and Looking Ahead,” The FCPA Report, Vol. 3, No. 2 (Jan. 22, 2014) (T. Markus Funk and Bo Dul).

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    K&L Gates Panel Reviews Anti-Corruption Enforcement in the U.S., the U.K., China, Australia, Latin America, Africa, Southeast Asia and Russia

    With the spate of new anti-corruption laws around the globe, and the evolution of laws already on the books, “it is critical for a company to have on-the-ground information and local support” in structuring an effective anti-bribery and anti-corruption (ABAC) program and responding to regulatory action in all of the regions in which it operates.  So said Dick Thornburgh, former Attorney General of the United States and former Governor of Pennsylvania, introducing a recent webinar presented by K&L Gates LLP, where Thornburgh is now of counsel.  The K&L Gates speakers who followed Thornburgh shared their direct local experiences and examined the state of the ABAC laws in their regions of speciality.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    A Guide to Anti-Bribery Issue Spotting in China: Enforcement Trends, Third-Party Risks, Gift Giving, Travel Expenses, Foreign Officials and Due Diligence

    Recent news reports, such as the downfall of Bo Xilai, as well as reports of watchdog groups such as Transparency International, emphasize the heightened corruption risk that companies doing business in China face.  Not only does the Chinese culture value gift giving and relationship building, but, because of the government structure, a large proportion of employees there are foreign officials.  This increases the range of business activity that may give rise to FCPA liability.  Plus, China’s top leaders have been paying more attention to official corruption and have taken steps to strengthen their own laws against bribery and step up enforcement.  A recent webinar focused on the topic of Chinese corruption risk.  The panelists, partners at Gibson Dunn & Crutcher LLP and Herbert Smith Freehills LLP, discussed: the current state of anti-corruption law and enforcement in China; China-specific anti-corruption issues; FCPA enforcement actions stemming from bribery in China; and ways to mitigate the FCPA risks of doing business there.  This article summarizes the key takeaways from the webinar, focusing in particular on the lessons for companies that do business in China and lawyers that represent such companies.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    Lessons from the Latest Anti-Corruption Developments in the U.K., Brazil and China

    A single-minded focus on the FCPA with a passing nod to other countries’ regulatory regimes is not enough to make a company’s compliance program first-in-class today; multinational companies must fully address an array of global anti-bribery laws in an environment of growing global enforcement and increased prosecutorial vigor.  Regulatory regimes in other countries may not be consistent with existing company compliance programs.  In a recent webinar, partners from Hogan Lovells shared their insight and experience on navigating the latest global developments in anti-bribery and corruption regulation and enforcement.  This article conveys the highlights from the discussion, focusing primarily on the anti-corruption regimes in China, the U.K. and Brazil.

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  • From Vol. 2 No.3 (Feb. 6, 2013)

    China Clarifies and Expands Its Anti-Bribery Laws

    According to a report recently issued by the Global Compliance and Disputes Practice Group of international law firm Paul Hastings LLP, recent guidance issued by regulatory authorities in the People’s Republic of China signals that those authorities may be placing greater emphasis on pursuing the payers of bribes, as opposed to their traditional focus on the recipients of bribes.

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