The Ninth Amendment to the Criminal Law of the People’s Republic of China (“Amendment”) came into effect on November 1, 2015. The new revisions extend the scope of criminal liability under the PRC law and address many key issues that have emerged in recent years. Notably, the Amendment revised several anti-bribery provisions, mainly to impose harsher punishment on offenders who provide bribes. The Amendment also added several provisions concerning personal data protection.
The Amendment provides certain key revisions to the current PRC Criminal Law:
- The Amendment introduces a new offense of offering bribes to the immediate relatives of State Work Personnel (“SWPs”)1 or individuals who have close relationship with SWPs. This offense also covers offering bribes to former SWPs, their immediate relatives, or individuals with whom they have close relationships.
- Before the Amendment, monetary fines were usually imposed on entity offenders. Individual bribe givers would only be fined when they offer a large bribe amount to an employee of a company, a foreign party performing official duties, or an official of an international public organization. However, the Amendment has imposed criminal monetary fines against individual offenders regardless of circumstances. It has also imposed monetary fines on individuals in charge of entities involved in or directly responsible for the corrupt activities.
- The Amendment has provided a more flexible and general sentencing criteria to replace the former standard of specific monetary amount. The new standards are divided into these categories: “relatively large,” “large,” or “extremely large” amounts. To date, no guidance or implementation measures explaining how these criteria will be applied have been issued.
- Existing PRC Criminal Law provides that criminal penalties against bribe givers can be mitigated or exempted as long as the offender self-reports before the commencement of a prosecution. Under the Amendment, an offender who self-reports before the commencement of a prosecution will only be eligible for an exemption of punishment under specific circumstances such as the offense was relatively minor or the accused has provided information to authorities leading to the “successful investigation of a major case.” Other than these special circumstances, the criminal penalties to be imposed on offenders who selfreport will only be lessened but not eliminated.
- The Amendment further stipulates certain restrictions on the entitlement to a reduction in sentencing where an individual convicted of embezzlement or accepting bribes is first sentenced to the death penalty.
- Under the Amendment, individuals who commit crimes that take advantage of their professions or violate their professional obligations, may be barred from engaging in such professional activities for a period of between three to five years after the completion of criminal penalties or the expiration of parole.
At this stage, it is not clear as to how the changes brought by the Amendment will be enforced and applied by Chinese authorities. The new offense of offering bribes to individuals who have a close relationship with an SWP or a former SWP, however, does pose further potential compliance issues for companies operating in China. It will almost certainly mean that the scope of any due diligence review of potential transactions, such as the review of potential joint ventures and other business partners, will need to be updated to take into account of potential risks arising from any relevant “close relationships” with SWPs. Further, given the highly discretionary nature of how the law is interpreted and enforced in China, there is no guarantee that the individuals involved might be exempted from punishment by self-reporting to the authorities before a prosecution commences. Those considering whether or not to take advantage of the newly amended self-report provision should first consider all the factual circumstances of any potential offense – how serious are the circumstances surrounding the case in question? If the facts involved reveal a potentially serious offense, then greater care should be exercised in assessing how useful the information at hand will be to the authorities and whether the facts to be confessed are already known to the authorities.