The Supreme People’s Court and the Supreme People’s Procuratorate in China recently issued a binding judicial interpretation on China’s Criminal Law bribery offences (Interpretation).
Among other things, the Interpretation clarifies important elements of the principal bribery offences, and represents a further step forward following amendments to the Criminal Law that came into force in November 2015 (November 2015 amendments).
We summarise below some key aspects of the Interpretation, in particular how these impact China’s supply side (active bribery) offences.
“Money or property”: The Criminal Law prohibits bribing with “money or property.” Article 12 of the Interpretation provides that “money or property” includes cash, items and proprietary interests. Proprietary interests are further defined to include any material interests that can be calculated in money, such as the provision of housing renovation or the release of debts, as well as other interests that are paid in cash such as membership services or travel. The amount of the bribe will be calculated based on actual payment or the amount of the payment that should have been made.
Prosecution thresholds for bribery offences: Articles 7, 8 and 9 of the Interpretation provide helpful guidance in this respect, setting monetary thresholds for certain supply side offences. They also provide monetary values for sentencing under Articles 390 and Article 3901 of the Criminal Law:
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Further thresholds set out in the Interpretation include:
orporate offence of offering bribes to persons associated with State Personnel: One of the key changes in the November 2015 amendments was Article 3901, which criminalises bribes offered to persons closely associated with State Personnel. The Interpretation provides that this offence can result in corporate liability. If an entity offers bribes to a close relative, or any person close to, State Personnel, it can be prosecuted under Article 3901 of the Criminal Law. Under Article 10 of the Interpretation, the prosecution threshold for this offence is bribes of RMB 200,000 or more.
Commercial bribery: A bribe to nonState Personnel (ie, commercial bribery) is criminalised under Article 164 of the Criminal Law. Article 11 of the Interpretation provides the “starting points” for prosecution of these offences, which had until now been undefined for the purposes of commercial bribery. If the bribe is more than RMB 60,000, it will be considered “relatively large” under Article 164 and result in imprisonment of not less than three years. If the bribe is more than RMB 2 million, it will be considered “huge” and result in imprisonment of more than three years but less than ten years and fines.
Mitigating factors: The November 2015 amendments to the Criminal Law provide that if the underlying crime is relatively minor and the offender plays a key role in investigating or solving a major case, liability may be mitigated or exempted. Furthermore, offenders who selfreport that they have offered bribes may be given a reduced or mitigated sentence.
Article 14 of the Interpretation provides further guidance on the applicable mitigating circumstances. In particular, it interprets “relatively minor crimes” as crimes for which no more than three years imprisonment can be imposed according to the sentencing standard above. If the selfreport plays a key role in the investigation or resolution of a “major case”, mitigation or exemption may be available. Here, “major case” means a case where imprisonment of more than 10 years may be imposed according to the sentencing standard above. The following actions constitute “a key role in investigating or solving a major case”:
- selfreporting information not yet discovered by the authorities;
- selfreporting information not directly related to a major case, but which plays an important role in resolving a major case;
- selfreporting having offered a bribe, which in turn plays a significant role in collecting evidence for a major case; or
- selfreporting having offered a bribe, which is significant in tracking down fugitives or criminal proceeds.
Criminal Fines and Disgorgement: The November 2015 amendments to the Criminal Law added criminal fines as another possible penalty, in addition to imprisonment as discussed above, for a number of bribery offences. Article 19 of the Interpretation provides that the range of fines should be between RMB 100,000 and twice the amount of the bribe. Article 18 of the Interpretation also provides that illegal gains from bribery offences should be disgorged and, if applicable, returned to victims.
Whilst it will take some time for the Interpretation to ‘bed down’ and face judicial analysis, it nevertheless brings some clarity to a range of bribery provisions under the Criminal Law. In particular, it seeks to remedy several ambiguities in language introduced by the November 2015 amendments. It also aims to tackle new forms of corruption, eg, bribes paid in noncash forms. The Interpretation also reinforces the Chinese government’s focus on corruption, and represents the latest step in president’s Xi Jinping’s commitment to clamp down on graft at all levels.