Key Points:

  • Extends potential charges of official bribery to relatives and friends of current and former state functionaries
  • Criminalizes illegal sale and unlawful disclosure of personal data by government entities in certain sectors
  • Revises tax evasion laws

China has provided extensive news coverage related to the passage of the Seventh Amendment of the PRC Criminal Law on February 28, 2009. The following updates have been singled out for particular public attention.  

Official Bribery

According to the Amendment, not only state functionaries may be convicted of official bribery, but also: (i) “close relatives” or persons otherwise having a “close relationship” with state functionaries and (ii) former state functionaries and their “close relatives” and persons otherwise having a “close relationship” with them. This update demonstrates the government is expanding its efforts to crack down on corruption of government officials.

PRC Criminal Law prohibits both the offering and acceptance of official bribery – bribery involving state functionaries – and non-official bribery, which involves non-official individuals and private entities. Both criteria and penalties related to official bribery are more severe than for non-official bribery.  

Personal Data Protection

The Amendment criminalizes as a “severe violation” the illegal sale or other unlawful disclosure of any citizen’s personal data by government entities or their officials and employees in the financial, telecommunications, transportation, education or medical sectors that such entities, officials or employees have obtained in the course of performing their duties or services. It is also a criminal offense for any person to obtain citizens’ personal data by theft or other unlawful means. Offenders may be subject to up to three years’ imprisonment.

One criticism of this provision is that its application is limited to the financial, telecommunications, transportation, education and medical sectors. Other entities that may have access to citizens’ personal data, such as stores and clubs, are excluded. Also, the provision is confusing in that it requires that there be present a prior confidentiality obligation or expectation, provided by other laws and regulations, in order for the sale or disclosure of personal data to qualify as “illegal” and thus trigger a criminal charge.

The criteria for determining whether a “severe violation” has been committed are expected to be clarified in future judicial interpretations by the Supreme People’s Court or the Supreme People’s Procuratorate.

This updated amendment is China’s first successful legislative attempt to protect personal data at the national level. Within the past two years, several provinces and cities have taken independent local legislative measures to address Internet privacy concerns, and the draft Torts Liability Law, which has been subject to lengthy and heated debate, is also said to include potentially important privacy stipulations.  

Tax Evasion

The Amendment revises the clause related to tax evasion that exempts first-time violators from criminal charges if they have since paid the taxes and received administrative penalties; however, violators who have received two administrative penalties or been held criminally liable in the last five years for tax evasion are not exempt. The Amendment also removes the threshold requiring evaded tax to equal a minimum amount in order for the evasion to qualify as a criminal violation, leaving more flexibility for the courts to decide whether the subject should be criminally liable. Nevertheless, it is specified that the court must rule on whether to lay criminal charges if the violator has evaded a minimum of 10% of due tax.