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Specific offences and restrictions
What are the key corruption and bribery offences in your jurisdiction?
Criminal Law offences
In general, providing, soliciting or accepting a bribe for the purpose of or in return for securing illegitimate benefits constitutes an offence. Conspiring to commit offences under the Criminal Law is also an offence, as is the use of an intermediary to facilitate a bribe.
Under the Criminal Law, individuals and entities are prohibited from:
- providing advantages to state personnel (Articles 389 and 393) or a state organ, state-owned enterprise, institution or people's organisation (Article 391) to obtain illegitimate benefits (this is a unique entity offence, which prohibits the bribing of an entity, but not of an employee or affiliated person of an entity);
- providing kickbacks or service charges to state personnel (Articles 389 and 393) or a state organ, state-owned enterprise, institution or people's organisation (Article 391) in violation of state provisions;
- bribing close relatives of, or any person close to, state personnel (including ex-state personnel) (Article 390(1));
- facilitating the bribery of state personnel (Article 392); and
- providing advantages to foreign officials (or international public organisation officials) to secure illegitimate commercial benefits (Article 164).
Under the Criminal Law, non-state personnel of a company, an enterprise or any other unit are prohibited from:
- accepting advantages from individuals or entities to secure illegitimate benefits where the amount is relatively large (Article 164);
- soliciting or accepting advantages from others by taking advantage of their position and seeking benefits for those that provided the advantages in return, where the amount involved is relatively large (Article 163); and
- accepting kickbacks or service charges during economic activities by taking advantage of their position, in violation of state provisions (Article 163).
‘Advantages’ under the Criminal Law are defined as "money or tangible property and other advantages which can be calculable in money". Section 12 of the April 2016 judicial interpretation of the Anti-unfair Competition Law stipulates that ‘property’ includes:
- property benefits, including benefits that can be converted into material benefits involving money, such as house renovations and debt exemptions; and
- other benefits involving financial payments, such as membership services and travel.
De minimis thresholds
There are minimum financial thresholds above which prosecutions can be brought. The April 2016 judicial interpretation of the Anti-unfair Competition Law is not comprehensive, but generally increased the minimum thresholds for criminal prosecution regarding graft. As regards making a bribe, the threshold is generally Rmb30,000 for individuals and Rmb200,000 for corporates. The April 2016 judicial interpretation does not refer to the Article 391 entity offence. However, the Supreme People's Procuratorate previously set the following thresholds allowing for formal prosecution to be commenced in this regard: Rmb100,000 for individuals and Rmb200,000 for corporates.
Bribes can be aggregated to meet these thresholds; if small bribes are provided regularly, the monetary thresholds will likely be met eventually.
Certain private sector bribery offences are criminalised only if the bribes are ‘relatively large’. The April 2016 judicial interpretation indicates that a bribe of more than Rmb60,000 will be considered relatively large.
Mens rea and lack of quid pro quo requirement
Corrupt intent is required for most criminal bribery offences (ie, specific intent to secure illegitimate benefits).
Intent can be inferred from the circumstances of a case and there is no strict requirement to establish a quid pro quo. Relevant factors when inferring intent include:
- the relationship between the giver and the recipient of the bribe;
- the value of the advantages offered; and
- whether the giver took advantage of the recipient’s position, considering the purpose, timing and manner of the advantage.
Civil offences (Anti-unfair Competition Law)
If the alleged bribery involves commercial entities and does not meet the criminal liability threshold, it may nonetheless violate the civil commercial bribery provisions of the Anti-unfair Competition Law. The Anti-unfair Competition Law aims to maintain fair market competition in China. Amendments to the law were proposed in February 2016 and are being debated. Thus, compliance with the law should be kept under review.
Article 8 of the law prohibits a business operator from:
- providing a bribe in the form of money, property or other means in order to sell or purchase goods or for-profit services;
- soliciting or accepting bribes when selling or purchasing goods or providing for-profit services; and
- secretly providing or accepting "off-the-book" kickbacks.
For the purposes of the law, the definition of a ‘bribe’ is wide and covers:
- promotional fees;
- advertising expenses;
- sponsorship fees;
- service remuneration;
- the reimbursement of various expenses; and
- other means, such as trips or visits (overseas or domestic).
Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?
In China, gift giving and hospitality are often seen as essential to building relationships. It is unlikely that reasonable bona fidebusiness hospitality will violate China's bribery laws where there is no quid pro quo and the benefits are properly recorded in the accounts. However, China's anti-bribery laws are broad – spanning a number of laws and regulations – and enforcement is inconsistent. As a result, corporate hospitality and relationship building through the provision of gifts, hospitality, travel and training may violate the Criminal Law and the Anti-unfair Competition Law in certain circumstances. Thus, care should be taken to observe the following points.
Various government organs and departments, including the State Council and the Communist Party of China, have issued a number of internal anti-corruption rules and regulations governing state personnel. Although these rules and regulations do not apply to bribe givers, they are a useful guide for determining suitable limits on offering gifts and business hospitality.
The context must always be assessed to determine whether gifts, hospitality, travel and training constitute bribes. According to the Opinions on Issues Concerning the Application of Law in the Handling of Criminal Cases of Commercial Bribery, issued by the Supreme People’s Court and the Supreme People’s Procuratorate, factors to consider when distinguishing a lawful advantage from a bribe include:
- the relationship between the offeror and the recipient (eg, whether they are relatives or friends or have or have had dealings);
- the value of the advantages offered;
- whether the offeror seeks illegitimate benefits by taking advantage of the recipient’s position, considering the purpose, timing and manner of delivering the advantages; and
- whether the recipient seeks illegitimate benefits for the offeror by taking advantage of his or her position.
The Leading Group’s Opinions on Limitations of the Policies in Anti-commercial Bribery Administrations also establish additional factors to be considered when determining whether conduct constitutes civil commercial bribery, which include:
- whether the conduct violates the fair competition principle;
- whether a gift or other advantage is offered in exchange for business opportunities, preferential treatment or any other economic interest;
- the seriousness of the case; and
- the level of harm to society.
The Leading Group's opinions, although not legally binding, contain practical guidance relating to anti-commercial bribery and gifts and business hospitality in China.
Gifts to government officials
According to the relevant rules (some of which are non-binding), the following are considered unacceptable:
- offering cash gifts or their equivalent (eg, securities with cash value, payment vouchers and commercial prepaid cards) to government officials in the context of their public service activities;
- providing gifts (regardless of their value) to government officials which could influence their impartiality in performing their public functions;
- obtaining, holding or using consumer cards for – among other things – gyms, clubs and golf courses, in violation of the relevant rules (in accordance with the Regulation of the Communist Party of China on Disciplinary Actions, which took effect on January 1 2016); and
- donating vehicles to other parties (if done by enterprises, public institutions or government individuals).
In general, high-value lavish gifts (eg, cars and luxury watches) are likely to attract scrutiny, particularly where the company or individual in question has dealings with the recipient. In light of applicable rules, lower-value gifts should also be approached with caution, particularly if they are one of several or are combined with the provision of other benefits.
Gifts to private sector employees
The provision of the following gifts to private sector employees involves a high level of risk:
- off-the-book kickbacks, transfers or commissions (disguised as service fees or discounts), as well as unusually high-value gifts and vouchers;
- gifts unlawfully offered during business activities (eg, if doing so would breach the Criminal Law, the Anti-unfair Competition Law or other applicable rules);
- gifts given in return for illegitimate benefits, particularly where the giver has dealings with the recipient;
- benefits – such as membership cards, vouchers, coupons, properties, vehicles or shares – which are offered in order to obtain business opportunities, preferential treatment or other economic interests; and
- donations that are offered in return for business opportunities, preferential treatment or other economic benefits (unless the donations are made in accordance with the Welfare Donation Law or other relevant regulations).
Entertainment and travel
Entertainment and hospitality offered with corrupt intent (eg, in exchange for action or inaction by government officials regarding their duties; or in return for business opportunities or other economic interests offered in violation of the fair competition principle) is prohibited. Corrupt intent can be inferred from other factors, such as the giver’s relationship with the proposed recipient (eg, if they have dealings) and the value and frequency of the hospitality offered. Lavish or unreasonably generous or frequent entertainment is likely to be problematic.
There are no additional rules governing the private sector. In practice, lavish meals and entertainment can be problematic.
Offering travel or accommodation to obtain illegitimate benefits is unacceptable. This includes:
- travel and accommodation offered in exchange for the recipient’s action or inaction regarding an act or influence; and
- expenses offered in secret and incorrectly recorded in the account books, where the companies or individuals in question have dealings.
In such instances, the context should be assessed. High-value lavish travel or accommodation is likely to attract scrutiny, particularly where the companies or individuals in question have ongoing business.
What are the rules relating to facilitation payments?
There are no rules under Chinese law comparable to those of the Foreign Corrupt Practices Act, under which a giver is exempt from liability for providing facilitation or 'grease' payments. However, Article 389 of the Criminal Law provides that “any person who offers money or property to a State employee under extortion but gains no illegitimate benefits shall not be regarded as offering bribes”.
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