The most recent FCPA and anticorruption enforcement developments involving the People’s Republic of China (PRC) are summarized below. Thanks as always to Squire Sanders Shanghai Office for monitoring these enforcement actions.
1. New law or regulation
- Criminal Procedural Rules of the People’s Procuratorate
On November 20, the Supreme People’s Procuratorate (“SPP”), the highest procuratorial organ of China, released the updated Criminal Procedural Rules of the People’s Procuratorate (“Rules”). According to the Rules, taking a bribe in the amount of RMB 500,000 (USD 80,281) or that has a major social impact or that undermines significant national interests will constitute a serious bribery offense and be subject to strict procedural requirements.
The Rules were modified to fit the demands of the amended Criminal Procedural Law and will come into effect on January 1, 2013.
- Interim Measures on the Management of Position-related Consumption for Executives of Central Financial Enterprises
On November 21, the Ministry of Finance, the Ministry of Supervision, and the National Audit Office jointly published the Interim Measures on the Management of Position-related Consumption for Executives of Central Financial Enterprises (“Measures”), which will take effect on December 1, 2012.
Pursuant to the so called “twelve bans” stipulated by the Measures, the executives of central financial enterprises are forbidden from spending extravagantly on cars and houses, or using public funds to buy apartments that should be paid for by themselves or to pay for home decoration or property management fees.
Local level (Beijing & Shanghai): No developments
Communist Party Rules: No developments
2. Upcoming law or regulation
3. Government Action
- On November 13, Huang Xiaoming (“Huang”), the former Deputy Governor of Jiashan County, Jiaxing City, Zhejiang Province, was sentenced to 14 years imprisonment by Haiyan County People’s Court, Jiaxing City, Zhejiang Province for accepting bribes and neglecting duties.
During Haung’s term from 2003 to 2011, he allegedly used his influence to help others in seeking illegal interests in return for receiving bribes totaling RMB 2.7 million (USD 433,520) and AUD 5,000 (USD 5,211). Huang was also charged of neglecting his duties in managing the Construction Bureau and the Land Resources Bureau of Jiashan County by supporting a real estate company owned by his brother for underpayment of the land use fee, determined to have caused economic losses to the country in the amount of RMB 13 million (USD 2.09 million).
- On November 15, Song Guangnan (“Song”), the former Deputy Captain of Guangdong Province Border Defense Corps was sentenced to life imprisonment and deprived of political rights for life by Mianyang City Intermediate People’s Court, Sichuan Province for receiving bribes and abusing his power.
During his term in office from 2003 to 2010, Song reportedly took advantage of his position to request and accept bribes from more than 10 people totaling RMB 10 million (USD 1.6 million). In exchange, Song granted benefits to these people in construction project, equipment procurement and land lease.
- On November 16, Li Shigui (“Li”), the former Deputy Mayor of Bayan Nur City, Inner Mongolia Autonomous Region, was sentenced to death with a two year reprieve by Baotou City Intermediate People’s Court, Inner Mongolia Autonomous Region for taking bribes and abusing his power. A death sentence with a two-year reprieve is usually reduced to life in prison if the convict behaves well while serving the term.
Li took advantage of his positions from April 2005 to November 2011 to secure illegal benefits for at least three real estate developers. In exchange for these benefits, Li reportedly received bribes amounting to RMB 15.36 million (USD 2.47 million), USD 10,000 and 2 kilogram gold bars worth RMB 616,000 (USD 98,906). Li was arrested on May 8, 2012 and prosecuted on September 25.
- On November 22, Tan Borong (“Tan”), the former Deputy Director of the Land Resource Bureau of Bazhong City, Sichuan Province was sentenced to 13 years in prison by Bazhong City Intermediate People’s Court, Sichuan Province.
Tan was found guilty of taking advantage of his positions during his term as the Party Secretary, Deputy Director and Director of the Land Resource Bureau of Pingchang County and as the Director of Land Resource Bureau of Bazhong City and receiving bribes in the amount of RMB 2.715 million (USD 435,928) and USD 10,000 from 16 individuals. Tan was sentenced to imprisonment with confiscation of all his illegal gains totaling RMB 2.71 million (USD 426,770) and USD 10,000.
- On November 22, Zhao Leiwu (“Zhao”), the former Deputy Secretary of the Working Committee of Haitang Bay, Sanya, was sentenced to 15 years imprisonment with confiscation of personal assets worth RMB 1.1 million (USD173,000) by the Baisha Court, Hainan Province.
During Zhao’s term as the Deputy Secretary, Zhao allegedly abused his position to secure benefits for 6 individuals in the process of land acquisition and resettlement compensation of Haitang Bay Project, in exchange for bribes totaling of RMB 3.268 million (USD 524,719).
- The President of China, Hu Jingtao (“Hu”), warned at the Communist Party Congress on November 8 that “Combating with corruption and promoting political integrity is a major political issue. If we fail to handle it, it could prove fatal to the party and even cause the collapse of the party and the fall of the state.”
- According to a report submitted to the 18th Communist Party of China (CPC) National Congress by the Central Commission for Discipline Inspection (CCDI) of CPC on November 14, a total of 668,429 people received disciplinary punishment within the party from November 2007 to June 2012. In addition, the report also pointed out that the CCDI has made major progress in tackling corruption and addressing the problems that draw the most complaints from the public in the past 5 years.
5. China-related FCPA Action