1. New law or regulation

State level: No developments.

Local level (Beijing & Shanghai): No developments.

Communist Party Rules: No developments.

2. Upcoming law or regulation

No developments.

3. Government Action

(1) It was reported on May 13, 2014 that three cadres from the Office of Civil Air Defense of Dandong City, Liaoning Province have been sentenced for abuse of power and bribe-taking. The three cadres are Song Deming (“Song”), the former Chief of Audit and Finance Department, Guo Hongfu (“Guo”), the former Chief of Engineering Department, and Liu Hong (“Liu”), the former Chief of Fortifications Management Department. The prison sentences were 13-years, 4-years, and 13-years respectively.

Reportedly, the three people were charged with abusing power during various three phases of activity, i.e., construction approval, administrative enforcement, and settlement of construction approval expenses. These caused economic losses to the state calculated at more than RMB 57.99 million (USD 9.27 million). Song, Guo and Liu were also accused of accepting bribes of RMB 200,000 (USD 31,983), RMB 40,000 (USD 6,396) and RMB 110,000 (USD 17,590) respectively.

(2) The Supreme People’s Procuratorate of the People’s Republic of China (the “SPP”) published a report on its official website on May 23, 2014 that Xu Yongsheng, the former Deputy Director of National Energy Administration (the “NEA”) and Wang Jun, the former Chief of the New Energy & Renewable Energy Department of NEA, had been placed under investigation for suspected acceptance of bribes. This announcement was published only two days following the report published by SPP on May 21, 2014 that the other two leaders of NEA, i.e., Hao Weiping, the former Chief of Nuclear Power Department, and Wei Pengyuan, the former Deputy Chief of Coal Department, were also under investigation. These cases have been interpreted as a signal that China’s central government is focusing on the bribery in the energy sector following the removal of Liu Tienan, the former director of NEA and Deputy Director of National Development and Reform Commission.

(3) On May 28, 2014, Lu Mouhai (“Lu”), the former Chairman of Guangxi Yugang Expressway Co., Ltd., was sentenced to 13 years in prison by the Intermediate People’s Court of Yulin City, Guangxi Province, with confiscation of his personal assets in the amount of RMB 1 million (USD 159,916).

Lu was found guilty of accepting bribes totaling RMB 5.12 million (USD 818,769) and EUR 5,000 (USD 6,799) during his term in office from 2011 to 2013 by taking advantage of his position. In return, Lu sought illegal benefits for bribe-givers in the form of personnel appointments and promotions.

(4) On May 29, 2014, Wang Suyi (“Wang”), a former Member of the Standing Committee of the Communist Party (“CPC”) of China, Inner Mongolia Autonomous Region Committee, was placed on trial at the No. 1 Intermediate Court of Beijing Municipality for taking bribes.

Allegedly, during Wang’s term as the government head of Bayannur City from 2005 to 2013, Wang accepted bribes from seven enterprises and two individuals amounting to RMB 10.73 million (USD 1.73 million). In exchange, Wang sought illegal benefits for the bribe-givers in the form of job promotion and company operations. A judgment is expected to be announced in a matter of days.

4. Other

(1) On May 14, 2014, the SPP reported in a press conference that during the first quarter of 2014, the procuratorate agencies nation-wide had investigated 8,222 cases relating to embezzlement and bribery and involving 10,840 individuals, and, of these, 661 were at the county level. There were also 2,245 cases involving dereliction of duties and involving 3,073 individuals, 137 of whom were at the county level. The number of investigated cases relating to embezzlement, bribery and dereliction increased by 24%, 19.8% and 10.2% respectively, compared to the number of such cases in the same period of the prior year. According to Xu Jinhui, the Director of the General Bureau of Anti- Embezzlement and Bribery of SPP, while SPP previously focused on crimes of taking bribes, it will, in the future, pay more attention to crimes of offering bribes.

5. China-related FCPA Action

No developments.