1. New law or regulation
On November 25, 2013, the Central Committee of the Communist Party of China and the State Council jointly issued the Regulation to Ban Official Extravagance (the “Regulation”), which regulate the management of funds, official travel, official receptions, official vehicles, and official conferences, etc. According to the Regulation, the use of official cars for general purposes will be canceled and only cars for law enforcement, confidential communications, emergency services, and special purposes will be retained. This Regulation is part of China’s anti-corruption campaign, which emphasizes no tolerance for waste or extravagance.
Local level (Beijing & Shanghai): No developments
Communist Party Rules: No developments
2. Upcoming law or regulation
3. Government Action
- On November 1, 2013, Tian Xueren (“Tian”), the former Deputy Governor of Jilin Province and Party Secretary of Bank of Jilin, was sentenced to life in prison for taking bribes by Beijing No. 1 Intermediate People’s Court, with all the personal assets confiscated. During Tian’s term from 1995 to 2012 as Party Secretary of Jilin City, Member of Standing Committee of Jilin Provincial Party Committee, Deputy Governor of Jilin Province, etc., Tian was found to have accepted bribes amounting to more than RMB 19.19 million (USD 3.24 million) on 85 occasions. In addition, by taking advantage of his positions, Tian sought illegal gains from other companies and individuals in loan approval, job promotion, and business contracts. Tian was given a lighter sentence due to his confession of the crime.
- On November 11, 2013, Xiong Guijin (“Xiong”), the former Party Secretary of Yunpu District, Nanchang City, Jiangxi Province, was sentenced to 17 years in prison by Nanchang Intermediate People’s Court. During his term in office from September, 2000 to May, 2011, Xiong allegedly accepted bribes in various currencies on 192 occasions from 35 individuals, totaling RMB 7.07 million (USD 1.16 million), USD 104,000, and HKD 40,000 (USD 5,159). In return, Xiong used his positions to seek unlawful benefits for the bribe-givers in job promotion, real estate development, and project construction. In addition, Xiong was found guilty of holding a large amount of property from unidentified sources, including RMB 5.84 million (USD 958,900), USD 150,000, HKD 120,000, Euro 40,000 and a valuable watch. All the illegal gains and the property from unidentified sources were confiscated.
- On November 15, 2013, Lu Xiangdong (“Lu”), the former Deputy General Manager of China Mobile Co., Ltd., was sentenced to life in prison for accepting bribes by Jilin Intermediate People’s Court. Lu, in collusion with others including his wife, reportedly abused his position to take more than RMB 25 million (USD 4.1 million) in bribes from 2003 to February 2011. Lu was given a lighter sentence due to his good attitude and confession of guilty, and his return of the illicit money.
- It was reported on November 18, 2013 that Lei Ting (“Lei”), the former Mayor Assistant of Maoming City, Guangdong Province, was sentenced by Guangzhou Intermediate People’s Court to 16 years in prison for offering bribes, accepting bribes, and abuse of power. Reportedly, Lei offered real estate property to Luo Yinguo, the former Mayor of Maoming City for promotion. Lei was found guilty in accepting bribes totaling HKD 400,000 (USD 51,596) from a real estate developer that was seeking approval from Lei for a construction project. The court also found that during Lei’s term as Chief of Maoming Planning Bureau, he had unlawfully granted approvals to various real estate development projects without receiving the necessary prior approvals from higher levels, resulting in losses to the state amounting to RMB 119 million (USD 19.53 million).
- On November 20, 2013, Wu Zhanhui (“Wu”), the former Deputy General Secretary of Dongguan Municipal Party Committee, Guangdong Province, was sentenced to life in prison and deprived of political rights for life by Guangzhou Intermediate People’s Court for taking bribes and holding huge property with unidentified sources. Wu was accused of helping a business man named Lai Hongzhong (“Lai”) in winning the bid for an industrial waste disposal project from 2003 to 2012 by taking advantage of his office. In return, Lai reportedly provided Wu with bribes amounting to RMB 49.7 million (USD 8.15 million). Wu was given a lighter sentence because of his confession of the crime.
- It was reported on the official website of the Central Commission for Discipline Inspection (“CCDI”) and Ministry of Supervision (“MOS”) on November 4, 2013 that CCDI and MOS have implemented an “Eight-point Code”, shortening the duration time for national conferences, simplifying official document categories by 56%, and cutting their conference expenses by 84.06% and reception expenditure by 52.07%. This was described as demonstrating the determination of the national disciplinary watchdog to fight against corruption.
- On November 8, 2013, the official website of CCDI and MOS released the names of 51 members of its discipline inspection teams who were stationed in major governmental departments and important state-owned enterprises. The inspection teams have been under the direct leadership of CCDI and MOS since 2004.
5. China-related FCPA Action
It was reported on November 26, 2013 that PetroChina Co., Ltd. (“PetroChina”), which is a subsidiary of China National Petroleum Corporation and is listed on the New York Stock Exchange, received notice from the U.S. District Court of Southern District of New York of a complaint brought by a Belgian investor who claimed that PetroChina had violated U.S. securities regulations. PetroChina has been the subject of an anti-corruption probe arising from investigations of the former Chairman Jiang Jiemin, the current chairman Zhou Jiping, the former CFO Zhou Mingchun, and the current CFO Yu Yibo. The amount claimed in the complaint is unspecified.