China has recently enacted new legislation to set up a brand new supervisory committee, which will absorb and consolidate the previously scattered investigatory functions of several independent anti-corruption agencies. This is an initial step taken by China’s national supervisory system reform as part of the implementation of President Xi Jinping’s pledge to put an end to corruption in China and the guiding principles of the sixth plenary session of its 18th Central Committee convened by the Communist Party of China (CPC) in 2016.

This trial plan is initially testing the water in three pioneering regions including Beijing, Zhejiang province and Jiangxi province, before it is rolled out nationwide. Supervisory committees are expected to be established at county, municipality and district levels in these three regions.

The integrated new body will be monitoring any personnel performing public functions. This refers to a wider group, not only government officials or management in state owned enterprises and institutions. It may, therefore, even monitor personnel working in privately owned enterprises as long as these individuals are performing public duties.

The powers originally shared amongst supervisory department/bureau of the local government, corruption preventing bureau and People’s Procuratorate will be integrated and a wide range of enforcement powers granted to this new body, including powers to summon suspects and witnesses for interviews, retrieve files, seize evidence, to search both individuals and properties, freeze assets, inspect venues and goods in relation to the alleged offence, to conduct expert evaluations, and powers of retention.

Conduct under scrutiny shall include any conduct which would constitute an offence of corruption and other public post-related offences such as, bribery and abuse-of-power offences.

To what extent the new supervisory committees will share information or prepare actions jointly with other anti-corruption agencies like the People’s Procuratorate is not yet clear. However, businesses operating in China should analyse their existing operations and business partner relationships for potential compliance risks now that another watchdog has been put into place.